I checked again relevant sites to find the accurate legal status of GrameenBank, the Bangladeshi Central Bank, IMF, World Bank, GrameenBank, only to find that, unless there are more clearer sources, GrameenBank is NOT a regulated bank. The government issued in 1983 a special law for GrameenBank as a MFI.

If you look on the Central Bank website, you find detailed lists of the banking sector in the country where GB is not mentioned (I did see BRAC Bank listed as a Private Commercial Bank); you find GrameenBank mentioned under NGO-MFIs, without even explaining the special status GrameenBank enjoys under the above-mentioned law.

This again underlines my point Sam, the lack of transparency frustrating the national process of Micro-Finance integrating into the formal financial sectors as an important tool in economic growth, job creation and poverty alleviation. I also had the opportunity of talking to Professor Yunus and he explained how difficult his relationship is with government authorities on the one side and with other, “competing”, NGO-MFI on the other. There are over 1.000 NGO-MFIs in Bangladesh alone, “fighting” for official recognition (including regulation and professional, impartial oversight) and the donor-bug.

We know each other now since the first MCS you organised in Washington ten years ago, and you know that I support MF as an important tool in poverty alleviation, and that I promote straight talk in a complex process that is local. Why don’t you ask GrameenBank, BD Finance Ministry and Central Bank to clarify the issue ?

Kind regards, Peter

I am a little surprized by your comments and your calls for others to become better informed.

Grameen bank
became a regulated bank under the supervision of the central bank of Bangladesh in 1983 after 2 years of lobbying by .Prof YUNUS.

I think that even many strong and knowledgable supporters of GrameenBank do not know or chose to ignore the big challenges GB and its colleagues face in the world.

Do you know whether GrameenBank has a Bank License with its Central Bank in Bangladesh, why not and why it is nevertheless allowed to use the (normally protected) term Bank? Do you know who GB’s biggest competitors are in BD and why they compete with each other in an unfair manner?, not on level playing field transparent and controlled market conditions, which bears risks for sustained development.

Finally, as you probably know, GB has changed its strategy and operations substantially, from group loans and rejecting voluntary savings (”the poor are too poor to save”) to becoming a professional retail bank (without proper regulation and supervision however) with continued commitment toward the poorer clients (women and men, groups and individuals). Why profile itself still as a micro-credit organisation for women groups of the poorest of the poor?

Please check out more sources of data and other information to better appreciate GB’s work, the huge complexity of making financial intermediation work for the poor. Finance can only be democratised, and can only support broad and sustained economic growth, when its supporters are fully knowledgeable.

Regards, Peter

Thank you for referring me to the MicroSave summary
report on Grameen II.

(I’m assuming you mean the one at http://www.microfinancegateway.org/content/article/detail/36640?PHPSESSID=22157fb459beb1f21e3148a889552e24
= http://tinyurl.com/yfhe6f)

Well worth the read.

It reinforces my understanding that Professor Yunus and
the Grameen Bank in Bangladesh are doing good work
that is raising people out of poverty. Particularly that they
continue to find ways to improve their methods.

Although I’ve spent only a few minutes reading the full
report on the study, that too, encourages me to continue
to support the Grameen Foundation in spreading
Grameen style microcredit throughout the world

Sincerely yours,
John S. .

Susan Davis

The point I wanted to make is that, as the transformation of GrameenBank shows (please read a recent report made by MicroSave, available on the MicrofinanceGateway) but which is not being highlighted by its Director Professor Yunus, the success of microFinance and not credit (only), depends on undertaking it as a business.

Doing business with money, and especially to help the poor, has always been and still being condemned by many people (including religious leaders). To make MicroFinance work as a tool to support the integration of the poor into the formal economies of developing countries is a complex local process that is based on local alliances, where foreign input often works as a frustrating factor.

Not explaining why MicroFinance, and not microCredit, can work as a strong tool in sustainable poverty alleviation, is an important risk. Stars do not appreciate that complexity as yet or decide to ignore it, risking condemning microCredit (and MicroFinance) to dependence and slow, if at all, progress.

Regards, Peter

Certainly anyone looking at the thousands of
organizations bringing microcredit to 100 million people
will find many organizations that are weak and —
worse— some that are abject failures. If that is what you
have seen, you are correct to point it out.

It is also possible that the Nobel Peace Prize Committee,
the more than 60 other organizations that have given
Professor Yunus awards for his work, and the more than
25 universities that have awarded him honorary
doctorates have made a mistake.

But when Professor Yunus walks into villages like Jobra
where his first micro loans were made 25 and 30 years
ago and sees relative prosperity where he once saw
abject poverty. . .when he walks into villages where
branches of the Grameen Bank are just being established
or are yet to be established and sees nearly the same
level of abject poverty he saw in Jobra 30 years ago, he
knows his work has been a success.

And if Bono and the awards and the honorary doctorates
and the Nobel Peace Prize perform a “signaling
function” that encourages you and me and others to
donate time and money to organizations like the
Grameen Foundation. . . and if that “signaling function”
gets legislators and executives and regulators to give
microcredit organizations the freedom and regulation
they need to do their best work, then those signals will
help microcredit organizations raise more people out of
poverty faster than ever before.

Sincerely yours, John S.

At the moment, there is so much proof of weaknesses in micro-credit activities and lack of its structural impact on the poor, that the examples of success stories appear to be anecdotical, ornamenting festivities organised by the mega-rich in first world countries.

Professor Yunus admits that Micro-Credit should be about making profits from financial intermediation of poor people’s capital (and not only women groups), to turn micro-credit institutions into sustainable Micro-Finance Institutions that demonstrate sustainable growth and continued improvement as a result of a local relationship between the MFIs and their clients, within a framework developed and supervised by local authorities. Fighting poverty is about creating wealth from the mutual trust in a specific local society; the value of money (and thus of financial services) depends on the emotional and moral values that citizens share.

At the moment, too many anti-poverty activities depend on charity from the mega-rich and are not based on local collaboration within the poorest countries ensuring lasting results. Nobels, Madonnas and Bonos invite the poor to their homes for some moments, and that is good for attracting attention to a problem, but these initiatives only have a signalling function.

Kind regards, Peter

Thank you. Bless you and your people.

Namaste,

Umoja

For my other compliment…http://spiritedseeker.zaadz.com/blog/2006/12/to_live_with_dignity

In his laureate’s lecture Professor Yunus said much that
is profound, much that is hopeful, and some that I don’t
(at least yet) fully understand.

But what hit me hardest wasn’t in his speech. It was in
his last reply in the article you linked to in the Times
in your post on December 10:

“They say, I’m asking for a job. He says I will create
jobs? How am I going to do that? Some say we don’t
know how to create a job. I said, if you don’t know, if
you don’t find an answer, you look at your mother, what
she has done. She didn’t apply for a job. Even if she
applied for a job, she will never get a job. She’s an
illiterate person.

“She borrowed from Grameen Bank. That’s why you
are here. And as a child she helped you to go to school,
maintained you and brought you all the way. You are
becoming a doctor, you are becoming an engineer. See
what she did? You know it much better than I do. If an
illiterate woman can create her job, what good is your
education if you cannot do better than your mother?”

What microcredit and Grameen’s encouragement of
education and scholarships have already done was done
for them at home and at school. What Professor Yunus
said in the Timesarticle is about their future
beyond home and school. About a transformation from
expecting to be job finders and job holders into becoming
job creators and job enhancers.

And I wonder: if they make this transformation and
become entrepreneurs, will that make as great an
improvement in what their lives will be after school as
microcredit has already made in their lives at home and
at school?

Will that make as great a change in the economics of
Bangladesh and other developing countries in years to
come as microcredit has already made?

Which leads me to this question: should we give this
more thought and discussion until we have the
understanding that will enable us to encourage it?

John S.

P.S. “In 1979 the Nobel Peace Prize went to Mother
Theresa for her work to help the poor die with dignity.
This year the Prize went to Muhammad Yunus for his
work to help the poor live with dignity.”

What a phenomenal quote. Did you catch the name
of the person who said it?