Microfinance Under Fire
Tuesday, March 22, 2011
At Fixes, our focus is typically on implementing new or underutilized ideas to help those in need. But sometimes it’s just as important to protect institutions that are already working well. Which is why I’m writing today about the Grameen Bank, the Bangladeshi organization that won the 2006 Nobel Peace Prize, along with its founder Muhammad Yunus, for its work extending microloans to some of the world’s poorest, and has been crucial in global efforts to lift millions of people out of poverty.
Both the bank and Yunus, have come under attack by the government of Bangladesh and its prime minister, Sheikh Hasina Wazed. It has taken 35 years of painstaking effort to build Grameen into a world-class institution that serves millions of poor people. That progress could be lost if the country’s leaders fail to appreciate what makes the Grameen Bank work.
Anyone who cares about international development, microfinance or social entrepreneurship should pay attention. The Grameen Bank is not just the largest microlender in the world, with 8.4 million borrowers (most of them women villagers) who received more than $1 billion in loans last year, it is the flagship enterprise in an industry that, in 2009, served 128 million of the world’s poorest families. It is also a leading example and inspiration for millions of citizen-led organizations that have been established in recent decades to address social problems that governments have failed to solve.
Yunus, the founder of the bank, is an entrepreneurial figure cut from the same cloth as Steve Jobs, the founder of Apple. He has devoted himself since the 1970s to demonstrating, institutionalizing and spreading microfinance. Recently, the government issued orders that Yunus is to be removed from his post as managing director of the bank. Yunus has taken the case to Bangladesh’s Supreme Court.