What went wrong with Grameen Bank and Prof Yunus?

A former colleague running an American commercial bank franchise in a large Asian country and also the president of the American Chamber there, several times tried to invite Professor Muhammad Yunus to join as the chief guest in a micro-entrepreneurship award-giving ceremony there, but failed. The professor was too busy during the last four years campaigning for a poverty-free world and more engagingly championing 'social business'. Now, my colleague came back to me last week asking, 'what happened to the great professor? How did he earn so much of controversy, specially in his own birthplace? Where will this end? And more importantly, what is the future of the only Nobel Prize-winning institution in our part of the world - Grameen Bank?" I think none of these are unusual questions today. The same is being asked by many people both at home and abroad, specially in the countries, communities and among stakeholders, where Bangladesh's own future is also tied up. The professor came up with an innovative idea of collateral-free and cooperative-based financing, built up a model and founded an institution to 'walk the talk'. Many joined the bandwagon later. Both the creator of the model or idea and the institution received the Nobel peace prize award. This earned his birthplace also a lot of laurels, good name, if not some positive branding, too. Then, what went wrong? Though, his name was being discussed in the possible Nobel awardees' list for quite a long time, the prize itself was a big thing for the professor. This was also reflected through the slogan 'Amrao Pari '(we can also do this). After winning the Nobel Prize in 2006, Prof. Yunus became a global citizen and became 'more big-hearted'. He graded Professor Iajuddin Ahmed, the then interim government president with full marks (100 out of 100), although this was not the case. He became a globe trotter, preaching the success of micro-finance and the importance of social business. Nothing wrong with this or unexpected. But his frequent absence from the country, did not allow him to do justice to his role as the Chief Executive Officer (CEO) of Grameen Bank. This was the time when his bank had lack of proper supervision. Without having a trusted CEO and an efficient management team, Grameen Bank saw its profit declining. Activities were not as focused, as it used to be. The professor put up most of his own students as his designated deputies. However, when the organization became big, his students (most of them were very trusted though) could not drive this to a new trajectory in his absence. One or two deputies felt their efforts were also not being rewarded, though they had reported inefficiency or integrity issues. Therefore, they either left or were shown the doors. Obviously, the directors from the government were overshadowed by the professor's global image and selfless contribution to building up the institution. Besides, they also had identified weaknesses. The professor firmly believes in democracy. When he was requested by the 'military junta', the main stakeholders of the 1/11 government, to take the lead, he politely avoided the offer and recommended his friend to join the 'clean up parade' and help in the transition back to democracy. When some of the stakeholders of change requested him to form a 'political party', he again resorted to public opinion. He took opinion from the citizens of Bangladesh by publishing a letter in the media, regarding forming a political party, followed by inviting short message service (SMS) over cell phone. After receiving a mixed feedback, he decided that it (politics) was not his 'cup of tea', and stepped back. This happened even at the cost of disappointing his many civil society friends, including the CEO of a leading `think tank', who used his own office garnering support for Yunus' proposed political party and afterwards voiced his support in favour of the military driven interim government and bagged an ambassador's position in Europe. Prof. Yunus is an applied economist, a visionary leader, but the fierceness and authoritarian discipline expected of politicians is absent in his character. Professor Yunus has become an extremely respected person, Grameen Bank an esteemed organization. However, seeing at what's happening around now, we are not only embarrassed, also concerned about the future of both the esteemed institutions, most importantly Grameen Bank's owning members, borrowers, micro-finance world and millions of stakeholders both at home and abroad. People may see it as only his job, but Professor Yunus cannot see his baby (Grameen Bank) weakening. To help the bank come out of its interim distress, Prof. Yunus and other stakeholders of the Grameen Bank, along with the government of Bangladesh, should all work together. It is about time that the great professor also does a `soul searching' and lists his priorities. Work should start on improving the internal governance, set up an effective succession plan, develop an efficient management team, ensure better fund management and engage in technology driven solutions. (The writer is a banker and economic analyst. This write-up reached the FE last Wednesday, the day Bangladesh Bank removed Prof Yunus from the post of Managing Director of Grameen Bank for his alleged violation of regulations relating to age-limit of job and his appointment process. The writer can be reached at: e-mail: mamun1960@gmail.com)