imperfect | world | 2010

Mar 8,2011

So who is to blame for the Yunus fiasco?

First place  has to go to the Norwegians. They (NRK) made a documentary which set Bangladesh on fire and then at crucial moments, like for example the whitewash Norwegian investigation into Grameen and the disgraceful pronouncements of Erik Solheim (the aid minister) exonerating Grameen, NRK was totally absent from the debate. NRK did not chase Solheim despite having all the facts and figures at their finger tips. Solheim was duping the Norwegian tax payer and no one bothered to take him to task about it.  When NRK finally did respond, it was in Norwegian and they did not supply an english translation. Bangladeshi journos were frantically emailing me to get a translation. The Solheim spin enabled Yunus and his supporters to go on the offensive and attack the documentary. So a totally needless own goal there by the scandinavian producers of the documentary.

Second it has to be the Norwegians again. A bunch of them sit together every now and then and give out this gong called a Nobel Prize. The process is entirely opaque. This prize has come to be seen as some kind of conferment which absolves you of everything. No matter what you have done, if you get one of these gongs, you are sorted …well almost. Thankfully, the High Court of Bangladesh did not take this into account - unlike so many pundits, bloggers and other defenders of Yunus whose only knowledge about this whole issue is that Yunus has a Nobel Prize and therefore ought not to be knocked off his pedestal and needs to be praised to the high heavens whatever he or his outfits do.

Third, for helping to sow much confusion about the reason for the entire debate, the finger has to be pointed at Hasina, the prime minister of Bangladesh. Why did she so flagrantly intervene - calling Yunus a “blood sucker” etc - when news first broke of the illegal transfer of funds to Grameen Kaylan? She should have had the common sense to keep out of it, and let the facts speak for themselves. She did not. She allowed confusion to reign as Yunus’ supporters went to town turning this serious issue of transparency and financial accountability into one about Hasina and jealousy.

Fourth, well it has to be the press, led by my friend and former proletarian champion Matiur Rahman of Prothom Alo. The poor seem not to be his priority anymore? Nor indeed are they the priority for the Daily Star which has served as the mouthpiece for Yunus.

Finally, one has to acknowledge the role of Yunus himself. Rather than go quietly having been caught , he assembled the most formidable array of foreign politicians, dodgy US ambassadors and senators and newspaper editors to spread the confusion. Talking of newspaper editors, he even got Dr Kamal Hossain’s son-in-law, David Bergman, a hack for the New Age, to be generally “economic with the truth.” Wil Yunus stop now? I doubt it. Has his grin been wiped off his face for good? I doubt that too but one can hope.

Breaking news - Yunus sacked

Mar 2,2011

Gloating is not a dignified thing to do. Today, and in this particular case,  I make an exception. Tom Heinemann’s documentary “Caught in Micro Debt” set off a chain events which resulted in a thorough evaluation of the operations of Grameen. And today the man who has headed it for decades has been sacked.  For decades Yunus has been the darling of neoliberals with his market solution to poverty. His grinning face is everywhere. For decades his zillions of fawning supporters have twisted the truth and failed to see the limited creature that microcredit is. I hope today that grin has been wiped off his face. For sure he is fighting back and he has powerful friends both at home and abroad. But this is a day to savour. I shall say no more. I am privilleged to have been part of the documentary. So thanks Tom.  And I thank my team in Bangladesh for this great result.

Grameen Re-think

  • Filed under: Misc
Feb 23,2011

Yunus’ supporters have tried to create a smokescreen so that the recent exposures appear as malicious and politically motivated. It is about time they took a more detached approach and seriously address the much needed restructuring that Grameen warrants. Why are they concerned about protecting Yunus and not the poor?

Here is an outline of issues to be addressed

  1. Grameen Bank is authorised to lend only to the landless poor

Grameen Bank is authorised to provide credit and other services to landless persons in the rural areas. It is not authorised to lend money to any person (or entity) other than the landless persons including Grameen Krishi Foundation, Grameen Motsho Foundation and Bigyan Gonoshikha Kendro as indeed it is not to Packages Corporation which it has done.

  1. Packages Corporation Limited.

Grameen Bank has undertaken a Managing Agency on behalf of Packages Corporation Limited (“Packages”), a family enterprise owned by his father, Mr. Dula Meah and his family in which Professor Yunus and his brothers, Abdus Salam and Mohammad Ibrahim are directors. Included under the terms of the Agreement, Grameen Bank and Packages Corporation would share losses on 50- 50 basis, Grameen Bank would have access to the loans taken by Packages Corporation and Grameen bank would lend money to Packages Corporation,

  1. Brothers appointed in entities created :

In one of these entities, his brother, one Dr. Mohammad Ibrahim has been made Executive Director, whilst Professor Yunus assumes the position of Chairman

  1. Furnishing Guarantees not authorised by law

In the Bangladesh Bank Audit Report, mention is made of guarantees having been granted by Grameen Bank favouring several of the entities created by Grameen Bank. These guarantees are not authorised by law or under GB’s own Memorandum and Articles of Association.

  1. Formation of companies without authorisation in law

Grameen Bank is a statutory body created by an Ordinance authorised to purchase shares of any body corporate the object of which is to provide services to landless persons in the rural areas. Grameen Bank is not authorised to sponsor, subscribe, incorporate new companies such as it has done.

  1. Unlawful transfer of funds to other entities formed by Grameen Bank itself

In all cases where Grameen Bank has formed new entities, companies, for profit or not - for -profit, financial institutions without obtaining a licence from Bangladesh Bank, trusts and hybrid  entities, it has transferred funds or provided guarantees against loans taken by these new entities  which it is not authorised to do.

  1. Professor Yunus’ continuance as Managing Director beyond 60 years in violation of the relevant laws

His continuance in office as Managing Director in violation of Clause 50 (1) of the Grameen Bank Service Regulations wherein it is provided that the age limit for employees of Grameen Bank shall be 60 years. This provision read together with Bangladesh Bank’s rules regarding the appointment and reappointment of heads of Banks and non-banking financial institutions only re-affirm his unlawful continuance in office for more than 10 years..

  1. Employment and Service Rules: whether made without authorisation

A serious question which has been raised is that the present Service Regulations of Grameen Bank has been made without authorisation in law. Indeed, these have been gazetted, but the Rules are deficient inasmuch, contrary to law, since, as delegated legislation, they are shown (i) as have been gazetted in the name of Professor Yunus who is Managing Director of Grameen Bank; (ii). there is no reference to the parent law from which such Rule – Making authority is derived nor any reference to the lawful person / legal entity upon whose instructions Professor Yunus has gazetted the Rules of Service;(iii) Professor Yunus is not authorised  to make Service Regulations for Grameen Bank. To ascertain whether any offence under this head has been committed or not it may be prudent to check the law relating to the notification in the gazette by statutory bodies.

  1. Usury/ Illegal interest rates

The basic case against the interest rates charged by Grameen Bank is that these interest rates are usurious (“excessive” or “illegal”) interest rates under the various laws relating to the charging of interest rates by Money Lenders. The principal legislation among these being the Usurious loans Act, 1918, the Money Lenders Act, 1933 and the Money Lenders Act, 1940; further, the jurisprudence of higher courts in the Sub-continent on “ usury’ under the said law or similar laws and in other similar jurisdictions clearly show that the interest rates charged upon landless persons in the rural areas is not only usurious but constitutes a violation of their fundamental rights as contemplated under the equality clauses embodied in  Articles, 27 and 31 of the Constitution. It cannot be a valid case to say that Grameen Bank’s rates are lower than the interest rates charged by other micro-credit agencies.

  1. Method of recovery

The method of recovery of loans practised by Grameen Bank is not authorised under the Grameen Bank Ordinance, 1983 (as amended to date, the last amendment having been made on 31 July, 1990) even upon rendering inapplicable certain provisions of the Public Demands Recovery Act, 1913. Further, the method of recovery practised by Grameen Bank is directly in conflict with the applicable law relating to recovery set out under the Money Lenders Act, 1940 under Section 41 (1) the effect of which violation has been defined as “molestation” of the borrower by the lender.

  1. Grameen – Gonoshasthya Textiles Mills Limited

Here, at the time of the formation of the company shares were allotted in the personal name of Professor Yunus, as indeed, all of the other subscribers of the company so formed, is self aggrandisement.

  1. Non-payment of savings of borrowers

This case is as unfortunate as it can get. Borrowers’ savings were put away into a fund to which they had no access. Borrowers departed without their savings between 1988 and 1992.

  1. Retrenchment – unfairly and on the basis of non existent Rules – coercion

The retrenchment of thousands (about 4000) of employees between 2000 and 2003, shown as voluntary retirement,  was not in accordance with any valid rules of service, and constitutes a blatant case against the rights of employees of a statutory body (whose fundamental rights also appear to have been violated).

  1. Loans from Banks taken by the companies created by Grameen Bank has been without authorisation in law.

The Ordinance / Statute does not provide for purported companies created by Grameen Bank to take loans from banks as these companies have done (take loans) for purposes which Grameen Bank itself cannot undertake, that is, undertake company activities other than providing credit and other services for landless persons in rural areas. In other words, can purported companies created by Grameen Bank do indirectly what Grameen bank itself cannot do, the said purported companies being born of Grameen Bank (validly or invalidly even!)?

  1. Activities: undertaking travel abroad for non-Grameen Bank purposes without authorisation from competent authorities.

It would be an issue to examine if the regulations relating to the undertaking of foreign travel by the Chief Executive of a statutory body requires the taking of permission from a competent authority and if permission was given for periods of time not consistent with pertinent rules / regulations by the competent authority for non – Grameen Bank purposes

  1. Grameen Kalyan

There was transfer of funds received by Grameen Bank from NORAD without prior authorisation of the Government and other regulatory bodies. The offences arising are multiple in nature: (i)“conversion” in criminal law; (ii) avoidance of tax payment (per Grameen Bank’s Reply to Bangladesh Bank’s Audit Report); (iii) elements of fraud upon  Grameen Bank itself, the NBR, the Government, the shareholders of Grameen Bank, the laws of Bangladesh and the people of Bangladesh.
In this unauthorised transaction the status of the parties, namely, (i) Grameen Bank, as recipient of a donation, was converted to become a borrower; (ii) the donor, NORAD’s role was converted to funding an activity not approved by the Government; (iii) ERD, which had permitted housing loans to be extended by Grameen Bank; (iiii) the new lender, Grameen Kalyan, was caused to undertake unauthorised lending since it had no licence from Bangladesh Bank to function as a financial institution. (See Grameen Kalyan’s Memorandum and Articles for the requirement of obtaining license from Bangladesh Bank to undertake lending activities which it had not done!)

  1. Grameen Telecom:

Apart from the issue of whether Grameen Bank has the legal capacity to incorporate a company which does not provide for the rural landless poor, the issue which arises is the status of the income earned by Grameen Telecom. Is Grameen Bank or Grameen Telecom entitled to hold such income in separate funds and accounts that have no nexus with the Grameen Bank’s statutory function to provide loans to landless persons in the rural areas?

  1. There are several other issues arising from a regime created without authorisation in law. This regime functions extra statutorily, extra constitutionally and in disregard of the obligations of a statutory body, association of persons or any other valid entity created under the law. The length and breadth of this regime extends to at least the equivalent of 20 ministries of the Government.
Dec 10,2010

Translated by Mr Google from

Norad’s fresh account of the Norwegian aid money for the Grameen Bank differs in several respects from the words of the secret stamped documents that have been in Norad’s archives since 1998. Norad looked away from 109 million at the time, according to the Norwegian Embassy in Bangladesh, was tapped from Grameen Bank.

5. May 1998 sent the Norwegian Embassy in Dhaka in Bangladesh, a note to Norad stamped “confidential”.

Here it was pointed out that “one of the closest people to Professor Muhammad Yunus” has contacted the embassy and “proposed a compromise”.

Compromise on Aid

The reason was the Norwegian requirement that 608 million kroner, which had been transferred from Grameen Bank to a newly created company (Grameen Kalyan), in its entirety must be returned to the Grameen Bank, which along with Yunus received the Nobel Peace Prize in 2006.

Of the total amount of 608 million kroner was, according to the Norwegian Embassy roughly 279 million provided by Norway.

The compromise was, according to the aforementioned letter from the embassy on that 120 million given in aid from Norway as a “final solution” returned to the Grameen Bank, “against the remaining funds allocated to the Grameen Bank on loans and revolving funds remain in the Grameen Kalyan ownership “.

Statement by documentary

On 7 December, a week after Burn Punk showed the documentary “Caught in Micro Debt”, came Norad with an account of what happenedwith the Norwegian funds.

Here is the conclusion that 170 million was returned to the bank from Grameen Kalyan after negotiations between Norad and the Grameen Bank, and that it was never entered into any compromise:

“With this, Norad and the Embassy’s requirements met. When the embassy in a letter dated 05/26/1998 coined the term “compromise”, it was linked to the Grameen Bank’s invitation to negotiate a compromise.Embassy and Norad had met all their demands for negotiations. “


This stands in contrast to the secret stamped documents Brennpunkt found in Norad’s archives. It says that the Embassy and Norad wanted the following Norwegian kroner assistance should be returned to the Grameen Bank:

  • 120 million awarded to Grameen Bank’s so-called revolving funds (mainly funds for mortgages) during Phase IV (1993-97).
  • NOK 64.8 million awarded to Grameen Bank to the revolving fund under Phase III (1989-92).
  • NOK 94.25 million given to the Grameen Bank to the mortgage for flood victims as additional appropriations (1987-92).

Overall, this is 279 million Norwegian kroner assistance, the Embassy of Norad’s support demanded that Yunus and his men would return to the Grameen Bank.

So this is 109 million more than the 170 million who Norad in his report wrote that was returned from Grameen Kalyan Grameen Bank.

Norad report 2010: Embassy / Norad in 1998:
Phase IV: 106 million 120 million
Phase III: 64 million 64.8 million NOK
Additional Appropriation: NOK 0 94.25 million NOK *)
*) According to the embassy was “the largest component” of this amount to the mortgage. The exact amount will not provide the documents, but said the embassy was “reasonable to consider these funds as a natural resident of the revolving fund and not as temporarily Grameen Bank can give to another institution for a new application.”

Discrepancies in the amount of assistance

There are two circumstances in which the discrepancy is not explained by Norad.

Firstly, the embassy wrote in 1998 that the support given to the revolving funds in the contracts under Phase IV was 120 million. Norad report writing, however, that the amount that was reversed during Phase IV was 106 million. Norad not explain the difference of 14 million.

Second, Norad away from the aid of 94.25 million crowns provided as additional appropriations. The largest component of this was the mortgage for flood victims who Embassy / Norad then in the secret documents that had demanded be returned from Grameen Kalyan Grameen Bank.

“Satisfactory solution”

Despite the fact that Norwegian aid authorities at the time believed that all these Norwegian amounts were unlawfully tapped from Grameen Bank, they went in for a compromise. In the aforementioned letter from the embassy to Norad 5 May 1998 justified this by saying that Norway is not the law in hand expect more:

“After the embassy’s view compromise proposal represents a satisfactory solution in relation to what might be applicable legal and contractual.”

Others were also involved

It is also worth noting that Norad’s statement does not take up the aid money from other countries and institutions that were transferred from the Grameen Bank Grameen Kalyan.

Grameen Bank was under the Phase III funding from the Assistance Consortium, consisting of NORAD, SIDA, IFAD, CIDA, GTZ, KfW and the Ford Foundation. Together, these institutions contributed with 420.4 million to the revolving funds in the period 1989-92.


In 1998, the contact Norad, SIDA, the Swedish aid authorities to notify them of the transactions from the Grameen Bank Grameen Kalyan. Focus has been told that from SIDA, the Swedish contribution during Phase III was the entire 190 million.

SIDA, however, chose not to pursue the matter, because they did not want to destroy the “credibility of the Grameen family,” as it says in a letter from the Swedish Embassy in Bangladesh, dated 17 March, as the Focal Point has received from SIDA:

“No one wants two make a big thing out of this as It Might angry the creditability of the Grameen family and pray That Would detrimental two the whole Cause.”

Based on the secret documents Brennpunkt found in Norad’s archives, there are many factors that the public still have not received an explanation or full access to:

  • 608 million NOK was not that donors were informed transferred to Grameen Kalyan, who had a completely different purpose than the Grameen Bank (among other things, to create joint ventures, invest in other companies, invest capital in shares, etc.).
  • 50 million had already been transferred from Grameen Kalyan Grameen Telecom / Grameenphone when the embassy raised the alarm. Whether and how much money has gone from Grameen Kalyan for other purposes, is not known.
  • Embassy / Norad agreed to a compromise of 170 million, which meant that not all of the Norwegian funds Embassy / Norad ever felt was unjustly transferred, was returned to the Grameen Bank.
  • We have no evidence to show that Grameen Kalyan has returned rest of the aid funds provided by other countries / institutions to Grameen Bank’s claim. Swedish aid agencies (SIDA) would not join in the Norway’s demand for repatriation of funds because they would not damage the Grameen Bank’s good name and reputation.
  • Embassy / Norad reacted strongly to the time that the money was transferred in part to save tax. Grameen Bank still using tax argument when they are currently defending the transaction.
  • All documents in the case was classified. Norad has not explained why this was necessary.
Dec 8,2010


It seems that 608 million (the documented 540 million aid NOK from NORAD and
other donors) were transferred WITHOUT INFORMING THE DONORS to Grameen Kalyan,
which had a completely different purpose than the Grameen Bank (among
other things, to create joint ventures, invest in other companies,
invest capital in shares, etc).

- 50 million had already been transferred to Grameen Telecom /
Grameenphone when the embassy raised the alarm.

- Embassy / NORAD originally demanded that all the Norwegian funds
would be returned and asked for a total amount of around 275

- Embassy / Norad agreed to a compromise of 170 million, which meant
that not all of the Norwegian funds Embassy / Norad at the time
believed was transferred was returned to the Grameen

- There is no evidence to show that Grameen Kalyan has returned rest of
the aid funds provided by other countries / institutions, as they
claim. Swedish aid agencies (SIDA) has provided evidence to us which
shows that Sweden gave 190 million Swedish kronor, which was
transferred from the Grameen Bank Grameen Kalyan. But they concluded
that they would not join in the Norway’s demand for repatriation of
funds because they did not want to damage the Grameen Bank’s good name and



Here is what Norway is saying. The Ministry of Foreign Affairs have however spectacularly failed to coordinate their story with Grameen’s response. There is a very definite disconnection between the two accounts.

The Norwegian Foreign Ministry states that their Embassy in Bangladesh “reacted immediately” and

“Following negotiations, it was agreed in May 1998 that NOK 170 million was to be transferred back from Grameen Kalyan to Grameen Bank.”

They also state that

“Norad’s report shows that Grameen Bank transferred a total of NOK 608.5 million to its sister company Grameen Kalyan in 1996″

IT IS CLEAR THAT A TRANSFER WAS MADE WITHOUT ANYONE BEING INFORMED. We also know from a letter dated May 27, 1998 that The Nowegian Embassy in Dhaka wrote a letter  to  Yunus where the embassy confirmed that they will accept the compromise proposal. It is that 170 million is returned from Grameen Kalyan to Grameen Bank. The remaining approximately 130 million kroner ( UPDATE ABOUT 105 MILLION) of Norway’s total support to the Grameen Bank could  in accordance with the compromise remain in Grameen Kalyan.

Total Norad money is not 170. It is 300 million. (UPDATE CIRCA NOK 275 MILLION NOT 300 ).  And what happened to the NOK 438.5 million? Quite clearly they insisted on the money going back but they didn’t manage to persuade Yunus to return all of it.

Grameen Bank’s response says:

“Afterwards not only Norad’s money, but the 100% of all donor’s money to the extent of Taka 3,474 million 501 thousand was “transferred back”, from Grameen Kalyan to Grameen Bank, although money was always in the Grameen Bank’s account.”

Very different stories there. 100 percent is not the same as the compromised NOK 170 million. And we know further that part of the money went to the profit making outfits Grameen Telecom/Grameen Phone from the embassy letter dated 10 February 1998 where it is stated:

“…..Grameen Kalyan has been able to pull funds out of the Grameen Bank and using them for purposes
other than they have been allocated by donors, and for other purposes than the Grameen Bank has the opportunity to provide loans. Grameen Kalyan has already granted BDT 300 million (approximately NOK 50
million) from these funds (SAF funds) to partially finance the project to the cellular Grameen Telecom / GrameenPhone.”

Are we surprised? Norway is the country which did not even set up an independent evaluation of the huge money that they gave to Grameen. Even after the transfers were detected, there was no evaluation of any sort after 1999. The attitude is one of condescension and aloofness - “lets just give these brown folk of Bangladesh the money and let them do what they want. We will have done our bit by throwing money at poor people. And that is all that counts.” That seems to be the vibe that is coming over like a bad smell.

Dec 7,2010

The transaction was NOT NEUTRAL as Grameen have portrayed it but
rather very significant.  We  have to consider the following important issues:

Grameen Bank shareholders had a hugely reduced stake suddenly WITHOUT
COMPENSATION. Indeed MORE THAN THAT they were burdened with debt by a
massive amount.


The Embassy were very concerned about the lack of safeguards:

“There is nothing in Grameen Kalyan statutes or the agreement between
the Grameen Bank and Grameen Kalyan, ensuring a certain level of the
funds in the future are available for the Grameen Bank or the members
of the Grameen Bank for home loan. The Grameen Bank’s letter dated
01/08/1998 stated however that the money be lent back to the Grameen
Bank will be used for the same purpose as when the assets were in a
rolling fund. However, Grameen Kalyan may require repayment of the
loan, and there is nothing in the agreement that such refunds should
be temporary. There is also no provision in the agreement that ensures
that the Grameen Bank are entitled to be reimbursed funds from Grameen
Kalyan under the original loan amount, if and when the Grameen Bank
has a need for this. This would, even though the provision was
included, it might be impossible to meet if Grameen Kalyan funds
invest long term, as it is intended for multiple purposes of
paragraphs.” ( Document date 10 Feb 1998. Royal Norwegian Embassy Dhaka)


In a letter dated 08.01.1998, Grameen Bank states that is working to
incorporate the date for the repayment of the loan into the contract
with Grameen Kalyan. So first the equity is transferred. Then loaned
back. Then interest paid on it and then it is paid back? And surely
that constitutes a double whammy?


A reason given was and is that the deal could reduce Grameen’s tax
liability. But according to an Norwegian embassy official, Yunus first
emphasized this rationale, then deemphasized it months later. And the
Bank disowned the rationale in a letter to Tom Heinemann in  August

Whatever the tax implications, this is a significant matter. NORAD’s
aid remit is to create economic development or  economic surpluses, if
you like, which can be taxed so that the state can use it for social
welfare etc. The agreement with Kalyan was a tool to regulate away ALL
THE SUPRLUS in the accounts of Grameen Bank.


The transaction which took place without any consultation basically
meant that management of the Grameen Bank has considered the funds had
been released from the conditions of the donors, and could be freely
managed by the Board.

This is moving money around as if it is in your own pockets.


Grameen’s response to the Ambassador’s concern amounted to what the
ambassador termed “untrustworthy.” Grameen Bank wrote to the
ambassador saying that by transferring the money Grameen would be
|”more responsible in handling it” ( page 2 of response to
Ambassador). And as the officials at the time speculated - were
the board members even informed of the details surrounding the
transaction? And if the Grameen Board included three government
representatives, as the Grameen Bank response says it did,  is it not
curious that the ERD originally indicated they found a breach of
agreement? They demanded that the money be returned to its original
status ( a grant and not a loan). Were the government representatives
on the board kept in the dark?

This is what David Roodman writes:

This Bank, entrusted with the serious responsibility of using foreign
funds to help the poor, would not entrust itself with the basic
function of a bank: holding money safely.  Or—more likely—the Bank was
and is lying.

This is moving money around as if it is in your own pockets.


It is worth bearing in mind that the report was not an independent
study. We know from Arne Disch, the Chairman of the 1999 report, that
there was concern about the composition of the team.

Norway never followed up with any further reports despite donating
such large sums of money. There seems to have been no responsibility
towards the Norwegian tax payer or indeed the poor people they were
claiming to help.


It is fully understood that poor people need financial services. Who
doesn’t? The documentary program only shows that such credit programs do not
necessarily solve poverty. They are not a panacea as some people want you
to believe.

In fact for many people it can push them in to further poverty. Giving
someone some money does not automatically mean they become successful
entrepreneurs. A lot of this money is not used productively. But most
importantly Tom Heinemann’s program shows that poor people also need consumer
rights. Rights to avoid becoming over-indebted. Rights of legal redress.
Rights against harrassment. And what the financial scandal shows is
their rights at the institutional level were infringed. The
microcredit market needs diligent regulation.

Nov 30,2010

Documentary: “Caught in Microdebt” by Tom Heinemann

Tonight a documentary will be aired on NRK Television where investigative documentary maker and journalist, Tom Heinemann,  reveals some dubious goings on in the financial empire that is Grameen. It again involves Professor Yunus duping the Norwegians ( this time the Norwegian government ) into giving him and his outfit money.

Sensational documents are being released by NRK show that the Norwegian Embassy in Dhaka was very seriously concerned by funds which were given to Grameen and which were then suddenly and without any notice transferred to Grameen Kaylan (you can find them here). There follows an exchange of letters where Yunus tries to justify his actions.   Professor Yunus  engages in the most specious reasoning to hoodwink the Norwegian ambassador. Clearly it had little or no impact and Yunus then turns to the head of the Norwegian aid organisation, NORAD, practically begging for a cover-up and for assistance.

The ambassador argued that the money was given to Grameen because of its nature and its ownership structure. If the money is transferred to another entity and then loaned back to it, as Yunus suggested was happening,  there would be a loss of equity for Grameen itself apart from the fact that the entire move was an ultra-vires one. Incredibly Yunus tries to argue that the financial discipline of Grameen would be improved if its equity was moved to Grameen Kaylan.

That aid funds should be used for purposes which are agreed upon is surely a principal which is in the interests of everyone to keep. How else are you going to assure donors to give? Only the staggering arrogance of someone like Yunus could contemplate such a flagrant dismissal of the agreement.

More than that - funds went missing apparently, Heinemann argues. Questions need answering. And Norwegians need to ask how long they are going to keep supporting this banker who is not even accountable to his own creditors.

The documentary also looks at the effectiveness of Grameen, and unsurprisingly concludes that it has had little impact on poverty. There are interviews with academics and experts from Bangladesh and elsewhere. In one segment Heinemann visits the home of the celebrated original grameen loan-taker - Sufiya Begum of Jobra Village. Celebrated in grameen folklore that is. He finds some very uncomfortable stories. She died in poverty and her daughters were beggars.

More about “Caught in micro-debt” here

And the full program in Norwegian ( international version coming in January) is HERE.

Here is Tom Heinemann’s blog post with a nice post by Milford Bateman - one of the development specialists featured in the film.

Oct 1,2010

Ummid 2010

Here is a report of our Ummid 2010 competition and exhibition. This was an international photographic contest and exhibition we organised on the the 2nd anniversary of the granting of citizenship to urdu-speaking Bangladeshis. Held at the Alliance Francaise de Dhaka in May, it received wide support and media coverage.

Read a brief report here and about some future plans.
See the slideshow here and see the winners here.

Tres Tristes Tigres

Jun 29,2010

A new short film directed by David Munoz and co-produced by me has just been finished. The film tells of the forced repatriation of three Bangladeshi migrant workers after the financial crisis in Dubai, and the implications for their lives.

David’s last short film - Flowers of Rwanda - won the Spanish Film Academy’s Goya Award for Best Short Documentary as well as 42 film awards from various countries all over the world.

Go to the web site HERE.

Press package HERE.

Rohingya Refugees ignored

  • Filed under: Asia
Mar 9,2010

An American medical charity has warned that thousands of Burmese refugees in Bangladesh are facing starvation. Physicians for Human Rights said government authorities are preventing the Rohingya, a Muslim minority, from receiving adequate care. Read here.

Still more trouble in the hills

  • Filed under: CHT
Mar 5,2010

Arsonists on Thursday torched four indigenous homes and a school run by UNICEF in the troubled Baghaichari upazila of Rangamati hill district. Read here.

Mar 4,2010

Done with very little consultation, this announcement summarises the state of democratic planning in bangladesh:

Dhaka, Mar 3 ( – Dhaka City Corporation has undertaken a massive project to construct 45 high-rise buildings at Mohammadpur to rehabilitate the tens of thousands of stranded Pakistanis who have been inhabiting rundown refugee camps for nearly four decades, since Bangladesh gained independence.

After completion, the project will provide permanent housing to 38,667 families of the Mohammadpur Geneva Camp.  Read the whole article here.

Feb 28,2010

“The EU calls upon the government of Bangladesh to swiftly and thoroughly follow up with an independent investigation of this incident and of the allegations that the armed forces were involved,” EU’s chief Catherine Ashton said. Read the article.

Dec 8,2009

The former military dictator has an interesting take on his role in the establishment of Grameen Bank.  He writes in today’s Daily Star:

Grameen Bank Ordinance was promulgated by me to establish Grameen Bank on September 4, 1983 when I had had barely completed my first year in office. One should understand how busy I was during those days.


My government allocated resources for Grameen Bank for its expansion program to cover the entire country at very generous terms, mostly, if I remember correctly, with aid funds from Sweden, Norway and Canada.


I did this deliberately so that Grameen Bank could provide loans to the poor at a rate that was affordable to the poor at 9-10%. I was assured by Grameen Bank that interest rate would be lowered to the desired level, when the expansion program ended in 1992. But over the years the interest rate went up from 13% in 1983 to 20% after I left office

Ershad is basically saying he was far seeing enough to realise what a good thing Grameen was and would be and thus he facilitated the way for Grameen through his unique “Grameen ordnance.”  He also deftly manages to remove himself from the widely criticised interest rates charged by Grameen!

Another take on this history would be that Grameen did not want to register as a bank or a cooperative. Yunus was able to do his usual politicking to milk the situation. Ershad, as a new military dictator, was keen on promoting a more humane image of his regime. And Yunus needed Ershad’s help to set his enterprise up as a parastatal agency overseen by a board made up of himself, state officials and a larger group of Bank clients. Yunus and Ershad needed to scratch each other’s backs and they did.