Muhammad Yunus on the crisis in microfinance

Muhammad Yunus

The Guardian has published an excellent, in-depth interview with Muhammad Yunus that provides perspective on the current crisis in microfinance.

Yunus, the Nobel Prize-winning economist credited with developing this anti-poverty scheme, has been at the center of his own crisis, which overlaps with the general crisis but is largely due to a political power struggle in his home country Bangladesh.

It one of only a few interviews he’s given since the government forced him out of running his hugely successful Grameen Bank for the poor. A few excerpts:

As the saying goes, a prophet is never recognised in his own country. Neither the global acclaim – nor the protestations of both the French and the US government – is making much difference to a government intent on destroying Yunus’s hold on Grameen Bank and the network of social enterprise companies he has developed over the last four decades.

The most likely explanation for the attacks on him is that Yunus’s brief foray into politics in 2007 unnerved (Bangladeshi PM) Sheikh Hasina. He announced he was going to set up a political party but ended up abandoning his the idea after only two months. His huge global reputation and the economic weight of the Grameen brand has made enemies insecure.

That last bit may be the most likely explanation, but perhaps not the only one. There’s plenty of evidence to suggest the attacks on Yunus are not just due to Bangladeshi politics.

As I’ve noted before, there is a fight right now for the heart and soul of microfinance — between those like Yunus who focus on the social mission of microfinance first and those who focus on it as a profitable way to perhaps also help poor people. The criticism of Yunus’ approach to microfinance really only exploded after he condemned the “loan sharks” who seek profits while only claiming to help 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.