Yunus worried at media 'vilification'

[integra]

Yunus worried at media 'vilification'

Dhaka, July 19 (bdnews24.com) -- Former managing director of Grameen Bank Muhammad Yunus has said he is disappointed and worried by the 'vilification' in the (Bangladesh) media.

"I'm not hurt by the vilification in the press; I'm disappointed and I'm worried. I don't want to see an organisation which has come all this way and brought so much good to the country and brought power to people, come to this. Many people are angry but anger doesn't solve anything," said Yunus in an exclusive interview with The Guradian, a British English daily, on Monday.

"I want to calm things down. If we are prepared, we can do damage control."

Since the crisis broke out early this year, Yunus has been refusing to talk to the Bangladesh media for fear of further inflaming the controversy.

Yunus is adamant that he will not be drawn into speculating as to why the government has forced his recent resignation. He simply says: "I can't see the purpose, I can't see what the country gains, what the government gains."

After Yunus was charged with allegation of siphoning money from Grameen Bank, prime minister Hasina on Dec 5 last year told a press conference that he was 'sucking blood of the poor'.

Earlier, during the army-backed caretaker government tenure, Hasina, criticising Yunus, said "there is no difference between a person who enjoys taking interest on money and one who takes bribe".

The prime minister also observed the microcredit programme of Grameen Bank failed to play its role in eradicating poverty.

Yunus, in his interview, denied the allegation.

Bangladesh Bank on Mar 2 sacked Yunus, who in 2006 became the first-ever Bangladeshi to win a Nobel prize, from the post of managing director of Grameen Bank for his 'unauthorised' reappointment in 1999.

"We never said microfinance was a silver bullet," he insists. "Or why would I bother to create 50 other companies ranging from agriculture to telecommunications?

Job creation is the solution to poverty. Loans should only be given to fund enterprises. They mustn't ever be used for 'consumption smoothing' or how can people pay back the loans? It has to be about income generation," he added.

 

[Tiki Tam Tam]

How unfortunate.

Is it true that the Grameen Bank charges higher interest than normal banks?

 

[integra]

How unfortunate.

Is it true that the Grameen Bank charges higher interest than normal banks?

It seems so but his philosophy does not involve charity,
he has mentioned it countless times.

"We never said microfinance was a silver bullet," he insists. "Or why would I bother to create 50 other companies ranging from agriculture to telecommunications?

Job creation is the solution to poverty. Loans should only be given to fund enterprises. They mustn't ever be used for 'consumption smoothing' or how can people pay back the loans? It has to be about income generation," he added.

 

[invisibleman]

Professor Yunus is a victim of his own achievements. If he had not gained the Nobel Prize, Sheikh Hasina would not pick on him.

 

[Tiki Tam Tam]

It seems so but his philosophy does not involve charity,
he has mentioned it countless times.

Please confirm if his Banks interest is more than that of the normal commercial bank.

I have asked this countless number of times and it has always been avoided.

I am not interested in Sk Hasina since both the Begums are bent on destroying Bangaldesh.

Every man jack use that things are not a silver bullet.

They are after all not the Lone Ranger!

 

[integra]

^ It revolves around 20% and there are programs such as the Struggling members scheme which apparently is interest free.

 

[Tiki Tam Tam]

20%

That is what the Marwaris (loan sharks) charge.

Notwithstanding the interest free for the deserving cases, how come that normal people bear up with this extortionist interest rate?

And what does the normal Bangladeshi commercial banks charge?

That apart, why has this high interest charging organisation got international recognition?

There must be good reasons.

 

[TopCat]

20%

That is what the Marwaris (loan sharks) charge.

Notwithstanding the interest free for the deserving cases, how come that normal people bear up with this extortionist interest rate?

And what does the normal Bangladeshi commercial banks charge?

That apart, why has this high interest charging organisation got international recognition?

There must be good reasons.

Its not like normal commercial bank where you get a secured loan and pay them back without banks to come to your home. For grameen and other micro finance bank have to go door to door for the servicing of their loan. They collect installment every week and also keep a close monitoring of the loan taker. These all invlove high overhead which is again passed on to the loan taker.

But the best part of it that the whole bank is owned by the loan taker. They themselve are the owner of the bank. So nobody actually sucking the blood and take that away. Whatever money Grameen makes again reinvested in Grameen or in other social business.

 

[Tiki Tam Tam]

Its not like normal commercial bank where you get a secured loan and pay them back without banks to come to your home. For grameen and other micro finance bank have to go door to door for the servicing of their loan. They collect installment every week and also keep a close monitoring of the loan taker. These all invlove high overhead which is again passed on to the loan taker.

But the best part of it that the whole bank is owned by the loan taker. They themselve are the owner of the bank. So nobody actually sucking the blood and take that away. Whatever money Grameen makes again reinvested in Grameen or in other social business.

Yes, I heard this aspect.

Could you explain how?

If a loan taker cannot pay, then what happens? Is he charged for the default?

 

[TopCat]

Yes, I heard this aspect.

Could you explain how?

If a loan taker cannot pay, then what happens? Is he charged for the default?

Yes he can be charged for default. But most of the time it does not go that far. A normal pursuation and at best a legal notice will make the loan taker to pay back as they are dirt poor and are afraid of papers.

Regarding the ownership, the bank is owned by its own stakeholders instead of investors. I am no exactly sure how it works. But it worked very well for Dr. Yunus as he could be kicked out of the bank for no reason.

 

[InFn-0]

Now the normal interest rate of bank loans are like 15-17% as there is a liquidity crisis. In that respect 20% for microcredit is only natural.

 

[Tiki Tam Tam]

Now the normal interest rate of bank loans are like 15-17% as there is a liquidity crisis. In that respect 20% for microcredit is only natural.

Why is it natural?

That is what I cannot understand.

Even if one goes to buy vegetables in the market, does he not roam all over and get the best price?

 

[harpoon]

Now the normal interest rate of bank loans are like 15-17% as there is a liquidity crisis. In that respect 20% for microcredit is only natural.

So Micorcredit is an another name for Loan Shark.

 

[Zabaniyah]

So Micorcredit is an another name for Loan Shark.

As far as Yunus's work in Bangladesh go - NO

There were reports about loan sharks in India and Latin America in systems based on the micro-credit concept as visioned by Muhammad Yunus. Well, that's their problem, not Dr. Yunus's and the vision he worked for.

In fact, there was one article written by him on NYT on the very subject of loan sharks.
http://www.nytimes.com/2011/01/15/opinion/15yunus.html?_r=1

 

[Tiki Tam Tam]

Zabanya,

Could you explain why people would pay a higher interest to Grameen Bank when commercial banks have lower interests.

I have not understood the logic.

I am quite sure there must be something or else people can't be that stupid!