SPOTLIGHT

Muhammad Yunus: ‘Banker to the poor’ embroiled in battle for integrity

Published : Jan 06, 2024 15:59 IST - 6 MINS READ

Nobel Laureate and founder of Grameen Bank Muhammad Yunus delivers a special lecture in Andhra Pradesh in December 2017. A court in Bangladesh on January 1, 2023, sentenced Yunus to six months in jail on charges of violating the labour laws.

Nobel Laureate and founder of Grameen Bank Muhammad Yunus delivers a special lecture in Andhra Pradesh in December 2017. A court in Bangladesh on January 1, 2023, sentenced Yunus to six months in jail on charges of violating the labour laws. | Photo Credit: VIJAYA KUMAR T

The Nobel Prize winner’s public profile in Bangladesh has earned him the hostility of Prime Minister Sheikh Hasina.

The Nobel-winning microfinance pioneer Muhammad Yunus is celebrated around the world for helping millions of people out of poverty but at home in Bangladesh, he has a powerful enemy. The 83-year-old, known as the “banker to the poorest of the poor”, was awarded the Nobel Peace Prize in 2006 for his work loaning small cash sums to rural women, allowing them to invest in farm tools or business equipment and boost their earnings.

Grameen Bank, the microfinance lender he founded, was lauded for helping unleash breakneck economic growth in Bangladesh, and its work has since been copied by scores of developing countries. “Human beings are not born to suffer the misery of hunger and poverty,” Yunus said during his Nobel lecture, daring his audience to imagine a world where deprivation was confined to history museums.

Also Read | Ushinor Majumdar: The BSF, the 1971 war, and the birth of Bangladesh

But his public profile in Bangladesh has earned him the hostility of Prime Minister Sheikh Hasina, who once accused him of “sucking blood” from the poor.

Victim of political persecution?

On January 1, he and three colleagues from one of the companies he founded were sentenced to jail terms of six months—but immediately bailed pending appeal—by a Dhaka labour court which found they had failed to create a workers’ welfare fund. This came days ahead of a general election to be held on January 7, which has been boycotted by the main opposition party, the Bangladesh Nationalist Party led by former Prime Minister Khaleda Zia.

All four had denied the charges and the case has been criticised as politically motivated by watchdogs including Amnesty International. “I have been punished for a crime that I haven’t committed,” Yunus told reporters after the hearing. “If you want to call it justice, you can.”

Irene Khan, a former Amnesty chief now working as a UN special rapporteur who was present at the verdict on January 1, said the conviction was “a travesty of justice”. “A social activist and Nobel laureate who brought honour and pride to the country is being persecuted on frivolous grounds,” she said. However, Bangladesh’s Road Transport and Bridges Minister Obaidul Quader said no one was above the law.

As Yunus is known to have close connections with political elites in the West, especially in the US, many think the verdict could negatively impact Bangladesh’s relationship with the US. But Foreign Secretary Masud Bin Momen on January 1 said relations between Bangladesh and the US would likely not be affected by an issue involving a single individual. “It is normal not to have an impact on the state-to-state relations for an individual,” the United News of Bangladesh agency quoted Momen as saying.

Yunus still faces more than 100 other charges on alleged graft and labour law violations. After one of the hearings in December 2023, Yunus told reporters that he had not profited from any of the more than 50 social business firms he had set up in Bangladesh. “They were not for my personal benefit,” Yunus said at the time.

Tussles with Sheikh Hasina

Hasina’s administration has been increasingly cracking down on political dissent, and Yunus’s popularity has, for years, earmarked him as a potential rival.

The year after winning the Nobel Prize, Yunus announced plans to set up his own Nagorik Shakti (Citizen Power) party to end Bangladesh’s confrontational political culture, which has been punctuated by instability and periods of military rule. He abandoned those ambitions within months, but the enmity aroused by his challenge to the ruling elite has persisted.

Since Hasina returned to power in 2008, Yunus has been hit with a series of criminal cases and a smear campaign by a state-led Islamic agency that accuses him of promoting homosexuality. The Hasina-led government unceremoniously forced him out as managing director of Grameen Bank in 2011 on the grounds he had stayed on past the legal retirement age of 60, a decision fought by Yunus but upheld by Bangladesh’s top court.

Prime Minister of Bangladesh Sheikh Hasina. In 2011, Hasina famously called Yunus a “blood-sucker of the poor” and sharply criticised Grameen Bank’s microlending practices.

Prime Minister of Bangladesh Sheikh Hasina. In 2011, Hasina famously called Yunus a “blood-sucker of the poor” and sharply criticised Grameen Bank’s microlending practices. | Photo Credit: Mark Lennihan/AP

In 2010, a Norwegian documentary titled Caught in Micro Debt alleged that Grameen Bank was dodging taxes. The documentary sparked criticism in Bangladesh and abroad of Yunus, whose bank has provided about $10 billion in small loans to people, most of them women, to fund businesses and help them escape poverty. A year later, Hasina famously called Yunus a “blood-sucker of the poor” and sharply criticised Grameen Bank’s microlending practices. Yunus has denied financial irregularities and his supporters say he is being discredited by the government because of a feud with Hasina dating back to 2007, when he had tried to set up Nagorik Shakti.

Grameen Telecom, a telecommunications firm he chairs, was hit with a graft probe in 2022 over accusations it had embezzled employee funds—claims that critics say are politically motivated. Grameen Telecom owns 34.2 per cent of the country’s largest mobile phone company, Grameenphone, a subsidiary of Norway’s telecom giant Telenor.

Hasina also blamed Yunus for the World Bank’s decision to cancel funding for a bridge near the capital Dhaka after the project was embroiled in a bribery scandal. The bridge finally opened in 2022 after years of construction delays, and at its opening ceremony, Hasina said Yunus should be “dipped in the river” for jeopardising its completion. Yunus has adamantly denied influencing the World Bank’s decision and his office has described the claims as “purely imaginary”.

‘Poverty was all around me’

Yunus was born into a well-to-do family—his father was a successful goldsmith—in the coastal city of Chittagong in 1940. He credits his mother, who offered help to anyone in need who knocked on their door, as his biggest influence.

Yunus won a Fulbright scholarship to study in the United States and returned soon after Bangladesh won its independence from Pakistan in the 1971 war. When he returned, he was chosen to head Chittagong University’s economics department, but the young country was struggling through a severe famine and he felt compelled to take practical action.

Also Read | If Sheikh Hasina loses January election, Bangladesh could face prolonged political and economic instability

“Poverty was all around me, and I could not turn away from it,” he said in 2006. “I found it difficult to teach elegant theories of economics in the university classroom... I wanted to do something immediate to help people around me.”

After years of experimenting with ways to provide credit for people too poor to qualify for traditional bank loans, he founded Grameen Bank in 1983. The institution now has more than nine million clients on its books, according to its most recent annual report (2020), and over 97 per cent of its borrowers are women.

Yunus has won numerous high honours for his life’s work, including a US Presidential Medal of Freedom awarded by Barack Obama.

(with inputs from AFP, Reuters, AP, and Bloomberg)

Sign in to Unlock member-only benefits!
  • Bookmark stories to read later.
  • Comment on stories to start conversations.
  • Subscribe to our newsletters.
  • Get notified about discounts and offers to our products.
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide to our community guidelines for posting your comment