By Muhammad Zafar Iqbal

I like Prof. Yunus a lot, and more than that I respect him. I also know that there are many like me. I remember, on hearing the news of Prof. Yunus' Nobel Prize I jumped about and screamed like a person gone mad with happiness. There have not been too many such occasions in my life. My happiness was not because someone I knew got the Nobel Prize but because the prestige of Bangladesh went sky high. Only those who have lived abroad can truly gauge how cruelly, indifferently and disrespectfully Bangladesh is sometimes talked about, and it is Prof. Yunus and his work that have helped us enormously to counter that. The Wall Street Journal in a recent piece, pointing out the difference between Pakistan and Bangladesh, wrote, "Pakistan's hero is a rogue nuclear scientist who unlawfully smuggled nuclear technology, while Bangladesh's hero is Prof. Yunus, winner of the Nobel Peace Prize for helping the poor with small loans".

Prof. Yunus is now the victim of a cold and calculated harassment campaign of the government. I think it must be a very important agenda of the Awami League, and this campaign would have started now or later. The perfect opportunity came when the Norwegian Television released a documentary regarding a dispute between Norad and Grameen Bank that was settled in the nineties. Following that, our Prime Minister launched a most vicious attack on Prof. Yunus that left sensible people in the country stupefied and hurt. Our finance minister spoke sensibly in the initial stage but followed the same tune when pressure was brought to bear on him.

The chairperson of Brac, the world's largest non-government organisation, in a statement expressed concern over the recent development at Grameen Bank. The bank is the centre of debate after the central bank removed its managing director Nobel laureate Prof Muhammad Yunus in connection with holding on to the post without prior approval from the regulator.

Abed said Grameen Bank is an extremely important institution serving about 83 lakh of Bangladesh's most under-served population. "The welfare of these borrowers and the continuous progress of the institution must be given the highest priority for any decision affecting the organisation."

He said the role of microfinance in ensuring financial inclusion and improving people's lives are well documented. "MFIs [microfinance institutions] such as Grameen Bank and Brac supported by Palli Karma-Sahayak Foundation have played a very important role in Bangladesh in ensuring this access to finance and enterprise development."

Brac has also played its role by providing additional support services in various areas such as health, education and agriculture through a multi-pronged approach for tackling poverty.

Twenty distinguished female personalities in a statement yesterday said Prof Muhammad Yunus' removal brings dishonour to the 20 million poor women who were empowered by Grameen Bank.

They demanded an end to this situation through a proper and respectable solution to the matter, says the statement.

"We, the undersigned, have been observing with great concern the harassment of Nobel laureate Dr Muhammad Yunus, who has contributed to the empowerment of the poor, especially poor rural women through alleviation of their poverty," it reads.

"Today nearly 20 million poor women of Bangladesh have been empowered through microcredit and contributed to the development of the country."

"It should be understood by all concerned that showing disrespect to the proponent of microcredit is tantamount to disrespecting the 20 million women," says the statement.

The signatories are Dr Hamida Hossain, Salma Ali, Rasheda K Chowdhury, Farida Akhter, Tahrunessa Abdullah, Prof Amena Mohsin, Salma Khan, Dr Maleka Begum, Prof Rounaq Jahan, Syeda Rizwana Hasan, Shaheen Anam, Shireen Huq, Mahera Khatun, Prof Ferdous Azim, Prof Najma Siddiqui, Prof Nashid Kamal, Dr Tasnim Azim, Simeen Mahmud, Prof Parween Hasan, and Prof Mahmuda Islam.

The couple lived in Savar, some 35 km from here, and had no income. That is, until they turned to the Bangladesh Rural Advancement Committee (Brac), the world's largest non-government organization working to reduce poverty.

"I was almost lost and had no skill to earn. But a neighbour told me that Brac lent money for small businesses for which they required no guarantor," 37- year-old Munni recalled.

"My husband and I wasted no time and appeared at the local Brac office to borrow money. Soon we found ourselves with some money to start vending on the streets and make profit," Munni added.

From the initial 5000 taka (40 dollars) she borrowed in 1990, her business has grown. Today, Munni has a small factory on the first floor of her two- storey concrete home in Dashkkhin Krinshnapur in Savar making sweetened puffed rice which is sold as far as 300 km southeast to the port city of Chittagong.

She employs 26 workers, and after paying labour, electricity and other costs, she has a clean profit of 1,000 dollars.

Millions of poor women like Munni have used loan money to successfully run their own businesses and free themselves from the curse of poverty, thanks to microfinance institutions like Brac.

Founded and introduced in the late 1970s, microfinancing is Bangladesh's success story. Recent studies suggest that over 11 million Bangladeshis have benefited from borrowings, making the country the global leader in the successful use of microfinance programmes.

Getting a loan from a microfinance institution (MFI) is hassle-free and client- friendly. These MFIs knock on the doors of their clients and require no formal paperwork. Anyone who lacks skills or assets will qualify for a beginner's loan that can lead to an advanced stage and bigger loans.

In Munni's case, after her first 5,000-taka loan, she took several more and successfully used them to expand her business selling sweetened puffed rice.

Since Munni paid back all her loans on time, she qualified for a second stage of borrowing known as Progoti where the borrower need not belong to a group. She was able to secure a loan of 450,000 taka (6,342 dollars) in three phases, the last tranche given in March 2010.

Despite debates about the differences between "getting out of poverty" and "staying out," numerous studies have revealed that this Bangladeshi invention designed for the poor has worked. More than 40 other countries now replicate the Bangladeshi microfinance models.

MFIs offer small loans at reasonable interest rates of up to 18 percent yearly, mostly to women who would not qualify for conventional loans.

"It is not about more or less regulation. What your microfinance sector needs is a separate set of regulations because the area they operate in is different from the area of commercial banks and other lending bodies," he told PTI on the sidelines of a CSR summit, organised by the Wockhard Foundation.

Yunus, who was answering a question about whether Indian MFI sector needed more regulation, demanded that companies like SKS Microfinance and others like it, who have turned "loan-sharks" overnight by commercialising, should stop calling themselves microfinanciers.

This is the best service they can do to the "real micro- lenders," he said.

"If you want to commercialise, please choose a different name, and not micro-financiers. Real microfinanciers are not commercially minded. Ours is not a commercial enterprise but a social business," the professor said.

He further pointed out that "the ultimate objective of MFIs is to ensure financial inclusion and not making profit.

So long as they work towards this objective, they are microfinance companies and when they start looking at profit they become loan-sharks or commercial entities."

Source: http://www.indianexpress.com/news/mfis-need-a-separate-regulator-yunus/752243/