Muhammud Yunus

Micro-lending's credibility takes another hit as Muhammud Yunus is removed as the head of Grameen Bank.

There was also a story on NPR this morning that also cited his creation of a rival political party as the underlying reason for the government to ask him to resign under the guise of exercising the rule concerning mandatory retirement age. Another interesting component of this story is that the people of Bangladesh, as reported by the correspondent, are actually ambivalent about Muhammud Yunus. Apparently they feel that he has used a portrayal of Bangladesh as a backwards nation with scores of poverty-stricken people as the means to gain his international fame.

Here's the transcript:
RENEE MONTAGNE, host:

The Bangladeshi government recently ordered him out as head of his bank, which is based there, but he's refusing to go. He's now battling his government in court to try and stay on.

To find out more, we reached Amy Kazmin, the South Asia correspondent for the Financial Times.

Thanks for joining us.

Ms. AMY KAZMIN (South Asia correspondent, Financial Times): Thank you.

MONTAGNE: Now from what I understand, the government says Yunus has to leave Grameen Bank that's the one that he founded - because he's in violation of retirement laws. That is, he's 70 years old, and according to the law in Bangladesh, company heads have to retire at 60.

Ms. KAZMIN: I mean, that is the technicality that the Central Bank of Bangladesh has used in ordering him to immediately relinquish his responsibilities as managing director. But actually, most people in Bangladesh believe that this is basically an orchestrated political campaign against him by the government of Prime Minister Sheikh Hasina.

MONTAGNE: Now, why would that be?

Ms. KAZMIN: Basically, in 2007, Muhammad Yunus, fresh off the back of his Nobel glory, announced plans to set up his own political party and clean up political life in Bangladesh, which is pretty notoriously corrupt. He dropped the idea within a couple of months, but as a result, I think the politicians in Bangladesh still see him as a potential political threat.

MONTAGNE: Well, for those who have heard of him, Muhammad Yunus is a hero, because he tackles social ills. He helps people better themselves, perhaps the most famous Bangladeshi in the world. What is his reputation inside Bangladesh?

Ms. KAZMIN: I think many people in Bangladesh are quite ambivalent, and they feel that his success has actually come on the back of the image of the country as being this kind of poor basket case, this deeply impoverished society. And I think many Bangladeshis actually kind of feel resentful towards that, because they feel that perhaps Bangladesh isn't quite so bad as he makes out in order to make his own case seem even stronger for his achievements.

MONTAGNE: Do you see a negative impact on Grameen Bank, or for that matter, on microlending in general, which also does have its problems in that area of the world already?

Ms. KAZMIN: Well, I think there's a few things. I mean, there's concern about the impact on the bank. There's a lot of concern that if Yunus is thrown out very unceremoniously and there's not kind of a stable, amicable transition plan, that depositors' confidence will be undermined, and that there could be a run on the bank. Because Grameen Bank doesn't just lend out money, they also take deposits. And they have over a billion dollars, I believe, of deposits. So if there was a run on the bank, that would be very destabilizing for the institution.

There's also the concern about microfinance in general. Globally, microfinance is actually in a bit of a crisis, going through a very intense soul-searching period because of a crisis not in Bangladesh, but in India, where microlenders - which have promoted themselves as these helping hands to poor - actually were accused of, like, over-lending and driving the poor into debt situations that they couldn't possibly ever get out of.

MONTAGNE: So his - if he is pushed out, what? That will make the whole microlending effort look that much worse?

Ms. KAZMIN: To be honest, I really don't think that Yunus being pushed out would necessarily heavily affect microfinance one way or the other, though it is a reminder of the political risks that microfinanciers face, as they say that they're trying to help the poor. Lots of politicians also want to be the allies of the poor and the protectors of the poor and may feel a little bit resentful about microfinanciers coming in and usurping that role.

MONTAGNE: Amy Kazmin is the South Asia correspondent for the Financial Times. She joined us from New Delhi.

Thanks very much.

Ms. KAZMIN: Thank you.

Bangladesh currently ranks 57th in the world in terms of GDP with approximately $105 billion in economic activity, ahead of Vietnam and just behind Kuwait. But with a population of 166 million and a resulting nominal per capita GDP of $641 (Wikipedia) it appears that Mr. Yunus' portrayal is mostly accurate.