Microfinance pioneer, after attacking profit-seekers, is counterattacked

Muhammad Yunus

The man, and Nobel laureate, who for more than 30 years has been celebrated as one of the world’s leading anti-poverty champions is fending off allegations of improper financial behavior.

Economist Muhammad Yunus won the 2006 Nobel Peace Prize for pioneering, through the Bangladeshi lending organization Grameen Bank, the anti-poverty scheme known as microcredit or microfinance.

As I’ve reported on here over the past few months, the field of microfinance has fallen into a crisis due to allegations of excessive profit-seeking, political manipulation and a general shift from its image as a noble experiment aimed at helping the poor to a scheme aimed at exploiting the poor.

Yunus has been one of the loudest critics of those organizations that he believes have gotten greedy and lost their way.

Now, as Matthew Bishop at Philanthrocapitalism and the Economist magazine both note, Yunus is himself being “defamed” by people making similar allegations against him.

Nick Kristof at the New York Times asks if Yunus’ pioneering Grameen Bank is at risk of being taken over by the Bangladeshi government for political reasons. The government, with leadership reportedly unfriendly to the outspoken economist and anti-poverty activist, has also launched a corruption investigation against him:

Very strange things are happening in Bangladesh these days. There seems to be a multi-pronged assault on Grameen Bank and on Muhammad Yunus, who won a Nobel Peace Prize for his role pioneering microfinance.

Yeah, strange. It’s funny that it’s taken more than 30 years for all these politicians and other critics to notice that Yunus is actually a crook.

Funny strange that this misbehavior has only now come to attention, after Yunus criticized commercial bankers and others who were trying to make personal profits off microfinance — and as politicians in Bangladesh and India appear to be trying to exploit the controversy.

Well, okay, it’s not funny at all. And, really, it’s not that strange. It just seems like a typical smear campaign.

Many are saying that the political response to some of the abuses in the microfinance industry may simply make matters worse.This apparent attempt to diminish Yunus’ stature by attacking his integrity is repugnant in itself, but of much greater concern will be if this mess undermines current efforts — however imperfect — aimed at helping the poor.

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Tom Paulson

Tom Paulson is founder and lead journalist at Humanosphere. Prior to operating this online news site, he reported on science,  medicine, health policy, aid and development for the Seattle Post-Intelligencer. Contact him at tom[at]humanosphere.org or follow him on Twitter @tompaulson.