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Eye in the Sky - Role of Government - Intervene, Interrupt or Supervise?

A day ago, I came across this headline, "Bangladesh government prepares to take control of Grameen Bank" from David Roodman's tweet feed and I also read the article, "Cabinet okays amendment to Grameen Bank ordinance". A few minutes ago, Muhammad Yunus' reactions has been posted in his respective website [Click here to read]. Also, read what David has said about the recent turn of events [Link]

I find the turn of events to be rather puzzling. Yes, it does bear a strange an uncanny resemblance to the movies, where the hero after successfully having thwarted all the bad guys has to give in to the Police and other authorities. Where were they in the first place? The Grameen Bank Ordinance now allows the Chairman of the Board to choose the Managing Director of the microcredit firm single-handedly. The Chairman of the Board will be a person appointed by the Government. Is it just me or is democracy getting stifled here?

I am not against the Government's motives or its recent moves. But I wish to question their motives with respect to two key areas:-
  • The Government in Bangladesh has asked respective departments to look into Yunus' wages and allowances received post the age of 60. It took them a decade and more to look into this - why the wait when he turned 60 in the year 2000?
  • So, a lot of effort is being put in proving that Mr Yunus has indulged in some sort of wrongdoing since 2010. I wonder if the Government has consciously put so much effort in helping the poor 
There are so many questions that can be posed at the nature of the allegations posted against Muhammad Yunus, the man once and still considered a brand name in the field of microfinance, is he the victim of political vendetta? 

Lets put all that aside, what exactly is the role of the Government when it comes to financial welfare of the poor people? 
  • Is it to safeguard the interests of the poor and ensure they have access to all basic amenities of life? 
  • Is it to ensure that all steps and measures are taken so that their livelihoods are protected by means of insurance in wake of a natural disaster or any other exigency?
  • If you are not providing a solution - should you not be playing a regulatory or supervisory role and ensure that things do not overboard at regular intervals?
These are turbulent times for the domain of microfinance. The name has garnered a lot of attention in recent times often for the wrong reasons. Will a change in delivery models or will strong results swing the tide back in its favour - only time will tell ...


  1. Hi Kenny,

    Thanks for the post. You rightly point out some reasons why the Bangladeshi government's actions are suspect. I think the motives of the government are quite clear:

    Grameen Bank is an effective institution that rivals the government in the area of providing social services to the poor. The government feels threatened by the Bank and by Mr. Yunus' popularity and hopes to co-opt the institution by gaining control over its management.

    As for your larger question about the role of government in social service provision, most people agree that the Bangladesh government's actions are inappropriate and violate basic democratic norms.

  2. Thanks for the comment Shardul, it does portray the Govt to be silly as well as sinister to an extent. How people vote such governments is beyond me? Ah, democracy ...

  3. The govt is good at politics, it successfully managed to demonize Yunus. As a result, a huge chunk of govt supporters hate Yunus.


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