The Grameen Bank, a microfinance institution in Bangladesh, is being run by government-appointed board members as of February 2015. In June 2013, the government invested USD 1.7 million to increase its stake in the bank from 3 percent to 25 percent [2]. The other shares are owned by millions of shareholders, many of whom are customers of the bank. Under the 2013 Grameen Bank Bill Act, this year the government appointed three of the four members of the quorum that is running the bank until a new board is elected, which could take up to a year. The government chose to appoint Khondaker Muzammel Huq, chairman of the bank’s board of directors; Suraiya Begum, senior secretary to the Prime Minister’s Office; and Shah Alam Sarwar, managing director of the International Finance Investment and Commerce Bank Limited (IFIC Bank) [1]. The fourth member of the quorum is SM Mohiuddin, the acting managing director of Grameen Bank. When the new board is elected, the government will revert to appointing just 3 of the 12 board members.
Former government advisor and economist AB Mirza Azizul Islam voiced his concerns over the government’s actions, “With these unnecessary changes, the government is tinkering with a system that has allowed Grameen to prosper, while many state-run banks are embroiled in scandals” [1].
As of December 31, 2013, the Grameen Bank has total assets of USD 2.2 billion, return on assets of 0.69 percent and return on equity of 11.36 percent. The bank has a gross loan portfolio of USD 1.1 billion and total deposits of USD 2.1 billion.
By Jeff Pierce, Research Associate
About Grameen Bank
Grameen Bank is a Bangladeshi microfinance institution that provides loans to poor entrepreneurs in rural areas. It was founded in 1976 by Muhammad Yunus, who, along with Grameen Bank, won the 2006 Nobel Peace Prize for his work in developing the concept of microfinance. Dr Yunus was forced to resign in 2011 by the Bangladeshi government, which owns a 25-percent equity stake in the organization. As of December 31, 2013, Grameen Bank reported to the US-based nonprofit Microfinance Information Exchange total assets of USD 2.2 billion, return on assets of 0.69 percent and return on equity of 11.36 percent. Grameen Bank also reported a gross loan portfolio of USD 1.1 billion and total deposits of USD 2.1 billion.
Sources and Additional Resources:
[1] Dhaka Tribune, “GB goes under full state control today,” Asif Showkat Kallol, http://www.dhakatribune.com/bangladesh/2015/feb/15/gb-goes-under-full-state-control-today
[2] Daily Online News, “Bangladesh denies plan to take over Grameen Bank,” http://dailyonlinenews24.com/2013/08/bangladesh-denies-plan-to-take-over-grameen-bank/
MicroCapital Universe Profile: Grameen Bank
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Grameen+Bank
Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/
Similar Posts:
- MICROCAPITAL BRIEF: Non-performing Loan (NPL) Ratios Up Among Microfinance Providers in Bangladesh
- MICROCAPITAL BRIEF: Arnur Credit of Kazakhstan Borrows $3.3m from Grameen Crédit Agricole to Expand Access to Microfinance
- MICROCAPITAL BRIEF: Grameen Crédit Agricole Foundation Loans $3.2m to Faten for Microfinance in Palestine
- MICROCAPITAL BRIEF: DPAM, Korys Buy Equity in Incofin Investment Management to Boost Impact, Including Via Climate, Gender Funds
- MICROCAPITAL BRIEF: Mi-Bospo of Bosnia and Herzegovina Borrowing $2.2m from Grameen Credit Agricole Foundation for Microfinance Lending