07 March 2011, Dhaka. On behalf of BRAC, I am expressing my concern at the recent development concerning Grameen Bank. Grameen Bank is an extremely important institution serving almost 8.3 million of Bangladesh’s most underserved population. The welfare of these borrowers and the continuous progress of the institution must be given the highest priority for any decision affecting the organization.
The role of microfinance in ensuring financial inclusion and improving people's lives are well documented. MFI organizations like Grameen Bank, BRAC and various local MFIs that are supported by PKSF 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 service support in various other areas such as health, education and agricultural support services through a multi-pronged approach towards tackling poverty.
We must understand that microfinance institutions like Grameen Bank are different from traditional organizations. A big capital of such organizations is the intrinsic community level trust that they have earned. This trust element must not be underestimated. If this trust is lost, then there may be delinquencies, intentional refusal to repay loans or large scale withdrawal of savings by the members -- in effect potentially bringing the organization’s future in jeopardy.
A sudden exit of the founder and the managing director of Grameen Bank and a legal battle between the board and the government may potentially cause a loss of confidence among its borrowers putting the organization’s future in doubt. For the sake of the millions of its members, we must take utmost care in not letting this happen. A carefully planned succession for Dr. Yunus can help a smooth transition and give the organization the stability that it needs to ensure the welfare of its members.
We hope that for any steps concerning Dr. Yunus or Grameen Bank due process will be followed -- keeping in mind the integrity of the institution concerned and also how lack of due process may affect the reputation of our country globally.
We must remember that development organizations play a complimentary and supportive role to the Government in national development. Recent dramatic decline on maternal mortality rate is a great example where such complimentary work can prove tremendously beneficial for the entire country and in effect globally improving the image of the country. Government and the NGOs must continue to work together to achieve the Millennium Development Goals (MDG) for which our Prime Minister recently got acclaimed internationally.
Sir Fazle Hasan Abed,
Chairperson,
BRAC
