Says Yunus
Nobel laureate Muhammad Yunus yesterday re-emphasised that there was no wrongdoing in the fund transfer from Grameen Bank to Grameen Kalyan.
The Grameen Bank founder described the disagreement with Norad, the Norwegian aid ministry, as honest disagreement and said it was a difference of opinion on “modality”.
“Other donor agencies did not raise any question on the modality, but Norad did. Later, we had resolved it,” said Prof Yunus.
Yunus said he is saddened to see how much of the local media dealt with the issue, and falsely suggested a diversion of funds for purposes unintended by the donors. He, however, wanted to put the controversy behind him and work unitedly for eliminating poverty in Bangladesh.
The Nobel laureate made the comments at a press conference at Grameen Bank headquarters in Mirpur yesterday. He addressed the media to resolve the debate that caused mental agony not only to him but also to many people in the country.
Prof Yunus said some local media published an inaccurate and misleading news report regarding an alleged “siphoning off” of a large amount of money by him through one of his organisations. The aid had been agreed, in 1994, between Grameen Bank and Norad to be used for housing loans for the poor in Bangladesh.
Reports in the local media were triggered following a documentary “Fanget I Mikrogjeld” (caught in micro debt) shown on Norwegian TV on November 30.
Yunus, however, ruled out any legal action against such libellous news reports that he was “siphoning off” Tk 7 billion.
He also saw no conspiracy against him, though he said some individuals might have added fuel to the controversy.
The microcredit pioneer read out a two-page statement explaining the issue of fund transfer that triggered the debate. He explained the job benefits he receives from Grameen Bank and his dream of sending poverty into the museums. Later, he answered questions of reporters on a wide range of issues including tax exemption, microcredit, public relations, corporate governance, GrameenPhone and social business.
Ministry of Foreign Affairs, Norway on the fund transfer
Prof Yunus showed how a latest Norad report on its assistance to Grameen Bank on December 7 cleared Grameen Bank from all allegations of wrongdoing. The report was published following a request from Erik Solheim, the minister for environment and international development.
“According to the report, there is no indication that Norwegian funds have been used for unintended purposes, or that Grameen Bank has engaged in corrupt practices or embezzled funds. The matter was concluded when the agreement concerning reimbursement of the funds was entered into in May 1998 under the government in office at the time,” said Solheim.
His role at Grameen Bank and in its sister concerns
Prof Yunus said he does not receive any monetary benefits, house, car or any allowance from any organisations other than Grameen Bank. He gets salaries and other benefits from Grameen Bank as its official. He has no share in Grameen Bank or any of its various organisations. Though he sits on Grameen Bank and other boards, he has no voting power.
Tax exemption
Grameen Bank gets tax exemption from the government. Grameen has applied to extend the facility on the eve of its expiry. Prof Yunus replied to a query that he has sought tax exemption for Grameen Bank because it benefits the poor. “It’s my moral responsibility to demand tax exemption,” he said. “If tax is imposed on Grameen then do it for other NGOs,” he said, adding that other NGOs (microlenders) get tax exemptions.
Microcredit
Muhammad Yunus defended microcredit as an effective tool in cutting down poverty but criticised the abuse of it.
He criticised over-commercialisation of microcredit by SKS, India’s largest for-profit micro financier.
“But it doesn’t mean the original concept of microcredit is flawed.” Microcredit is meant to help the poor with loans, he added.
The comment came after his attention was drawn to SKS that staged a highly successful initial share offer in India in August.
It came at a time when analysts fear India’s seven-billion-dollar micro-finance industry could be thrown into crisis by a bill that seeks to regulate lending to the poor more tightly.
The legislation, slated to be taken up Tuesday by lawmakers in southern Andhra Pradesh state–hub of India’s microcredit activities, sets new rules aimed at cracking down on aggressive lending and recovery practices.
Yunus explained the microcredit operations of Grameen Bank. Its interest rate is 20 percent, which is lower than the government rate at 27 percent.
Grameen Bank offers four types of interest rates for borrowers: 20 percent for income generating loans, 8 percent for housing loans, 5 percent for student loans and zero percent for beggars.
In its publications, Grameen explains: “All interests are simple interest, calculated on declining balance method.”
This means, if a borrower takes an income-generating loan of Tk 1,000 and pays back the entire amount in weekly instalments within a year, she will pay a total of Tk 1,100 (Tk 1,000 as principal and Tk 100 as interest for the year, which is equivalent to a 10 percent flat rate).
Grameen declared 30 percent cash dividend for 2009, which the micro-lender said was the highest cash dividend declared by any bank in Bangladesh for the year.
The highest record of dividends declared by Grameen was in 2006: it was 100 percent.
Yunus defended his oft-repeated vision of sending poverty to museums, a target that many think is far from achievable.
“Let’s set a target to erase poverty from Bangladesh by 2030. This is my dream.”
“If there is a target to halve poverty in 15 years by 2015 in line with the millennium development goals, then it is my dream of eradicating poverty in another 15 years.”
On Prime Minister’s comments
Yunus declined to comment on prime minister’s remarks about him. But he said whatever she said was her view.
On political ambition
Prof Yunus said he has no plan to get involved in politics. “A wise man hardly repeats the same blunder,” he said.
Prof Yunus tried to float a political party during the caretaker government rule in 2007.
On GrameenPhone
Norwegian company Telenor owns two-thirds of GrameenPhone’s share. Prof Yunus after the Nobel peace prize demanded Telenor handover its shares to Grameen. As to whether he sticks to the demand, Yunus said, “We still pursue it, but we cannot legally enforce.” He said Grameen has nothing but to request Telenor.
Public relations at Grameen
Replying to a query Prof Yunus admitted that Grameen had deficiency in public relations affairs. “Now a dedicated person has been appointed to deal with the issue,” he said.
Media business
Yunus said media business should be social business, otherwise the space will be taken up by the owners’ news. “I have got offer from India and the US to launch a TV (television) and a global networking media respectively,” he said. But he did not say whether he is going to get involved in the media business.
Corporate governance in Grameen Bank
About establishing corporate governance in Grameen Bank, he said it depends on the board. He said the government nominates the chairman and two directors in the board who along with other directors can decide on it.
At the end, the Nobel laureate urged all to work together to build the country, which he believes has immense potential. “I want cooperation from all, and confrontation with none,” he said.
According to him, poverty is still the number one problem in Bangladesh and only unity can address the issue meaningfully.
