A working paper commissioned by the Bangladeshi government regarding Grameen Bank, a Bangladeshi microfinance institution founded by Nobel Laureate Dr Muhammad Yunus, proposes a government takeover of Grameen Bank or a split of the institution into 19 entities. The paper recommends that the Bangladeshi government own 51 percent of the shares of Grameen Bank, an increase from the current 25 percent. [1]
The paper reportedly has sparked criticism from analysts, economists and other civil figures. In a statement attributed to Dr Yunus, the proposal is “unworkable and deserved no consideration,” and “the government takeover of a sound financial institution owned by 8.4 million poor women would be a case of an extreme abuse of government power.”
The paper can be found at http://www.muhammadyunus.org/index.php/sub/1164-grameen-bank-commission-s-invitation.
As of December 31, 2011, Grameen Bank reported to the US-based nonprofit Microfinance Information Exchange total assets of USD 1.63 billion, return on assets (ROA) of 0.41 percent and return on equity (ROE) of 6.82 percent. For the year 2012, Grameen Bank reported a gross loan portfolio of USD 1 billion and total deposits of 1.67 billion.
By Meghan Gillis, 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 company. As of December 31, 2011, Grameen Bank reported to the US-based nonprofit Microfinance Information Exchange total assets of USD 1.63 billion, return on assets (ROA) of 0.41 percent and return on equity (ROE) of 6.82 percent. For the year 2012, Grameen Bank reported a gross loan portfolio of USD 1 billion and total deposits of 1.67 billion.
Sources and Additional Resources
[1] The Hindu Business Line: “Grameen Bank’s proposed split sparks criticism,” http://www.thehindubusinessline.com/news/international/grameen-banks-proposed-split-sparks-criticism/article4830098.ece
MicroCapital brief, May 16, 2013, “MICROCAPITAL BRIEF: Bangladeshi Microfinance Institutions Boost All-Time Microcredit Disbursals to $2.7b,” https://www.microcapital.org/microcapital-brief-bangladeshi-microfinance-institutions-boost-all-time-microcredit-disbursals-to-2-7b/
MicroCapital brief, August 13, 2012, “MICROCAPITAL BRIEF: Grameen Bank Ordinance Seen as Power Grab by Bangladeshi Government, Bank Refutes Claims by Prime Minister of 45% Microloan Interest Rates,” https://www.microcapital.org/microcapital-brief-grameen-bank-ordinance-seen-as-power-grab-by-bangladeshi-government-bank-refutes-claims-by-prime-minister-of-45-microloan-interest-rates/
MicroCapital brief, April 24, 2012, “MICROCAPITAL BRIEF: Bangladeshi Government to Investigate Muhammad Yunus, Social Businesses Associated with Microfinance Institution Grameen Bank,” https://www.microcapital.org/microcapital-brief-bangladeshi-government-to-investigate-muhammad-yunus-social-businesses-associated-with-microfinance-institution-grameen-bank/
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