THE BANK OF THE POOR

There are times when government shout quite literally mind its own business and leave things well alone. A good example of when government should leave well alone is that of the Nobel Peace Prize-winning Grameen Bank in Bangladesh. A Bangladeshi Government commission has come up with a plan that recommends splitting-up the Grameen Bank into 19 segments, which has understandably raised fears that the government is attempting to strengthen control over an institution which has helped more than eight million impoverished people in the country.

At the moment the government owns three per cent of the bank based on equity, while the rest of the shares are held by the bank’s members, who are mostly women. Amongst the recommendations contained within the eight-page working paper -  “The future of Grameen Bank: Some Options” – is a recommendations to restructure the bank, and the awarding 51 per cent or more shares in the bank to the government, along with a majority seats on the board of directors.

Back in August 2012, the government of Bangladesh changed a 29-year-old law which governed the Grameen Bank, to give more power to the government-appointed chairman to choose the bank’s chief executive. This development came after the government removed the bank’s founder, Muhammad Yunus, in 2011, from his post as managing director of the bank (in 2011). The government suggested that his was because he had passed retirement age.  

If implemented, any of these recommendations would destroy the independence of the Grameen Bank and undermine the women borrowers and shareholders who have made the Bank what it is today. Currently the Grameen Bank serves over 8.4 million borrowers. Its shareholders, the majority of whom are poor women, are proud of its success and committed to its core mission. They understand the plight of poor and rural women because many of them have faced the same challenges. This is one of those occasions when government should leave well alone.