Grameen Bank's Troubles Broaden: WSJ and FT Thrash Dr. Yunus as Prime Minister Chastises Business Model

If it weren’t already enough that the Norwegian government is trying to investigate Grameen Bank’s books from some fifteen years ago, now the local government, just down the street, sitting in Parliament is out for some explanations from Grameen Bank’s founder Dr. Mohammad Yunus.

Sheikh Hasina has  chastised Dr. Yunus for the micro-credit business model that he popularized as a panacea to the wider ills of poverty and social disenfranchisement.  Indeed, the Prime Minister squarely put the cause of the ongoing fiasco in microcredit markets directly on the malfeasance and mis-management of  micro finance institutions like Grameen Bank.  She said: “Micro-lenders make the people of this country their guinea pig. They are sucking blood from the poor in the name of poverty alleviation.”  She demanded a full investigation to work through the allegation.  In no small measure this move to beat up on one of her country’s most well-regarded citizens is part of her broader plan to approach international partner and build stable working coalitions for Awami Leagues economic and electoral future.

Now the foreign Minister Dipu Moni has joined the parade to thrash Dr. Yunus. She has gone on record to support a probe into Grameen’s finances.  No doubt fearing that the scandal would tarnish not just Dr. Yunus’ reputation, but that of the country entire,  Dipu Moni claimed: “We want the truth to be divulged through appropriate inquiry. No one is above the law no matter how influential he might be”.  Bangladeshi firms has been clawing their way to international relevance.  It won’t do to ruin Bangladesh’s standing as a credible market in which to do business.

The ramped up international pressure on Grameen Bank began when NORAD, Norway’s development agency leveled the charge that Dr. Yunus inappropriately used international development aid funds.  At first, Dr. Yunus denied the severity of the allegations. There were those that thought this news old hat, a point of misunderstanding easily put away as long as Dr. Yunus explicated the arrangement to the satisfaction of all the stakeholders to the allegation at issue.

Indeed, so seemingly immaterial were the accusations, given business as usual in Bangladesh, the finance minister of , AMA Muhith initially came to his rescue. Dr. Yunus then, as now, maintained that the allegations brought against him and his non-profit and for-profit enterprises, were baseless. Mr. Muhith now seems to want to stand aside  while the government, of which he is a member, rolls over the reputation and conduct of this storied and ballyhooed individual.

Dr. Yunus’ perceived intransigence has caused outrage amongst market-makers, triggering a barrage of passive accusation from mainstream, intermational outlets like the Wall Street Journal and, most recently, the  London based Financial Times newspaper.

Given that these two newspapers report on, and perhaps, help conduct the business of the day,  Grameen and its esteemed founder would be well-off to be careful how it conducts its business in this matter for the next few days.