Sunday, October 15, 2006

Reinstated The Yunus Story

In my last article I thought that I don't need to write more about Prof. Yunus today. But, a few blogs changed me. It's quite shameful to see that a group of people spreading anti-Grameen Bank news across the internet. Most probably these are the reaction of jealous competitors of Prof. Yunus and his Bank.

The forwarded mail posted in the blog talks about various points. Let me try to clarify the reader about the person and his concept of Microcredit. Let me go through pointwise.
Do you know in most cases it is the husband / father/ elder brother who controls
the Grameen loan taken in the name of his wife/daughter/ sister?
- Well, this does not change the facts of repayment and the noble business cause the person is after.
Do you know the bank charges around 30% interest?
- It means that no other Bank in Bangladesh charges less than that. Otherwise how did the Bank grow?
Do you know that Grameen borrowers lend the borrowed money at 80% to 100%
interest to fellow villagers?
- Why the other villagers are not elligible to get the loans directly from the Bank? The information seems to be an isolated example and not a generic one.
Do you know any other business where someone can still make a living by
borrowing at 30% interest rate?
- So, they could not repay and the Bank would have vanished within days of it's birth. Where from the money is coming that is adding to grow the Bank itself?
Do you know in some villages (especially in Sylhet) men take three/four wives to
get Grameen loan to run their lucrative money lending business?
- Again, some isolated examples of failure can not be treated as against the notion of generic success the Grameen Bank has achieved.
Do you know that the poorest of the poor (as touted by Yunus, Clintons and
others) are not eligible to Grameen loan as they cannot repay their loans in 52
instalments at 30% interest? Do you know that only middle peasants (having some
lands or assets) are eligible to the credit?
- come on man, had this been the case, the concept of micro-credit would not have any meaning at all. People are not that fool. Also, in a later point the same author has written that Grameen simply does nothing to a defaulter. So, what's the use of the assets of the borrower?
Why do you think Monsanto, the giant US corporation, engaged in marketing
genetically modified seeds (disastrous in the long run as peansants will have to
buy the seeds before every sowing season) is a big promoter of microcredit?
- The concept of business is simple. Monsanto wants people to buy seeds. People has to have money to buy seeds. So, Monsanto would encourage micro-credit. The same concept is applied when Microsoft gives free training on Microsoft platforms in poor countries. They simply want people to use their products and make it a de-facto standard, which will give them an edge in emerging countries, that they could leverage later.
Why does Grameen Bank pay no income tax to Bangladesh?
- It's a decision of Govt of Bangladesh and I hope they have found the cause reasonable enough.
This is the largest cellphone company in Bangladesh, charging for localincoming
calls as well.
- Charging for incoming calls is a part of their business strategy. If they can survive with that in the market, I see no reason why this should be criticised.
Is there a link between thisaward and Grameen Phone's (Dr Yunus's cell phone
company) partnership with the Norweigian telephone company, Nortel?
- First of all, Nortel is a Canadian company. Nortel is a giant and has relationships with many telecom service providers. We can not conclusively derive anything from this fact.
Do you know that the Nortel has been siphoning off millions of dollars to Norway
withoutpaying any income tax to Bangladesh?
- According to the author anybody else who would have supplied switches (Nortel is famous for switches) would have taken away money from Bangladesh. So, is there another company who gives similar equipment at lower cost? Why then Nortel is still a giant Telecom equipment manufacturing company.
If micro-credit could alleviate poverty, why on earth hundreds of thousands of
Bangladeshis are going to Dubai, Saudi Arabia, Kuwait or Singapore,
borrowinghundreds of thousands of takas (two lakh per head on the average) to
work as menials? If borrowing fifty or sixty dollars could alleviate poverty,
why are theydoing so? Are they stupids?
- The last argument exposes the stupidity of the author. Grameen Bank is not a panacea which will cure the poverty disease of Bangladesh. It's an effort and each effort has it's own limitation. He cannot make people rich overnight, nor he has ever claimed so. He has got the Nobel prize as a recognition of his effort. Regarding migration, everyone wants more. So, they migrate with the hope of more earnings, a better life.

It's quite irritating to respond to these foolish anti-Yunus campaigns. Still, I can take the pain of writing my view so that I can stop the anonymous route of defamation messages. I think I have succeeded, but the reader has the last say.

N.B. - I am adding this after a few repercussions around this writing. I hereby explicitly declare that I have no stance for or against the blog which I am referring to at the beginning of my writing. The person has copied the mail into his blog. I was trying to counter the logic presented by the author of the mail (Taj Hasmi) only and I am aware of neutral position taken by the author of the blog.

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