Muhammad Yunus, the Nobel Peace Prize-winning economist who pioneered the anti-poverty strategy of microfinance, is being pressured by Bangladeshi politicians to “retire” as head of the Grameen Bank — the financial institution he set up some 30 years ago to provide small loans to the poor.
The politicians say they think it’s time Yunus, age 70, moved on and turned over the bank to someone younger to carry on its mission.
Yunus and his supporters, however, say this is a politically motivated move to reduce the out-spoken economist’s influence and also allow government takeover of Grameen Bank.
Whatever is driving this tussle, I think it’s fair to say the field of microfinance, or microcredit, is at a critical turning point today. Maybe you could even say it’s in a crisis, an identity crisis.
As Yunus sees it, microfinance is now at the center of a battle between those who want to use the practice primarily to help the poor as against those who see it as a means to make money while also perhaps helping the poor.
Put another way, you could say it’s about “doing well by doing good” versus “doing really, really well for yourself by appearing to do good for others.”
Turns out, there’s serious money to be made in microfinance. Yunus has been quite outspoken as a critic of those who seek to profit off microfinance, which some say may have something to do with why he’s now under attack.
Given the uncertain future of microfinance — whether it can (or does) work as a means to lift people out of poverty and if it can do so while also making people money — it seems like the outcome of this political power struggle in Bangladesh could have global ramifications.