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.