Home >> Global Organizations >> Other

     Email   Print 

Mohammad Yunus image show in NYC

Sunita Paul - 5/2/2008

Controversial Nobel Peace Prize laureate, Professor Muhammad Yunus has recently opened a branch of his Grameen Bank in New York's expensive Jackson Height area with the initial spending of a few million dollars. People will Bangladesh must have already heard the news of such grand opening, which once again, brought Yunus to media's focal point. But, they will for sure never know the behind stories as to how this 'banker for poor' spent unimaginable amount of money in organizing the posh office thus putting huge amount of capital to run the virtually 'Muhammad Yunus Image Show' in United States. On 25th of April this year, the branch was inaugurated in New York City. Yunus claims in his biography to be a full bright scholar and professor with Chittagong University. But, facts never stand in favor of Yunus being a professor with this prestigious institution.


According to various press reports, Grameen Bank claims that this is the first formal branch of Grameen in New York. Grameen Bank had already launched its micro-credit project in different states in the US basically under the patronization of former President Bill Clinton and his wife, Senator Hillary Clinton, who are close friends of Yunus.


Grameen further claims that, many have submitted their applications for getting loans from Grameen's Jackson Heights branch as the micro-credit program has already become very popular among millions of Spanish-speaking people as well as South Asians in the area.


Sudhirendar Sharma, a development analyst, claims that the Grameen Bank has "landed poor communities in a perpetual debt-trap", and that its ultimate benefit goes to the corporations that sell capital goods and infrastructure to the borrowers. It has also attracted criticism from the former Prime Minister of Bangladesh, Sheikh Hasina, who commented, "There is no difference between usurers [Yunus] and corrupt people." Hasina touches upon one criticism of Grameen Bank: the high rate of interest that the bank demands from those seeking credit. Similar to all microfinance institutes, the interest charged by Grameen Bank is higher compared to that of traditional banks, as Grameen's interest [reducing balance basis] on its main credit product is about 20%. The Mises Institute's Jeffrey Tucker has criticized the Grameen Bank, asserting that the Grameen Bank and others based on the Grameen model are not economically viable and depend on subsidies in order to operate, thus essentially becoming another example of welfare.


According to facts, Grameen Bank Jackson Heights initial capital is US$ 1 million while Yunus has spent more than two hundred thousand dollars just for setting the new branch in United States. Although Grameen is basically a Bangladeshi bank, no permission had ever been taken from the Central Bank in Dhaka for remittance of such a huge amount of money, which was already required for acquiring office space, decoration, recruitment of staffs and the working capital. It is anticipated that, such amount had either been smuggled out of Bangladesh through illegal means or had been shifted from hidden bank accounts of Yunus in foreign banks.


Grameen America has smartly situated itself in Jackson Heights, which teems with new immigrants.


"Bangladeshis, Indians, Latinos will follow it, but I don't know about others," said Saiful Islam, a microfinance expert who works in leading network. He doubted whether the group model is well suited for the American market.


"Grameen has to keep in mind how they make their model flexible enough to adapt in a multicultural society," he said.


A common misconception is that micro financing is meant to help the poorest of the poor. "It's actually supposed to help those below a certain poverty line who are looking for self-employment as a route out of poverty," explained Raj Desai, a fellow at the Brookings Institution and a professor at Georgetown University.


Many see Grameen America's role as fitting a particular niche. "Grameen has the potential to replace the predatory banking the immigrant communities' face," Mr. Desai said, "though I'm not sure I see much success outside of immigrant communities in urban areas."


Although Muhammad Yunus is trying to convince the American immigrants that his lone intention is to make banking possible to poor sections in the society, it is greatly apprehended that the ultimate goal of this branch will be to highlight the image of Yunus as well as search funding for his Grameen Foundation as well as other business ventures. A team of Public Relations and business development people will be busy in attaining this goal. Moreover, Yunus will also use the office of Grameen Bank, Jackson Height branch as the publicity wing for Senator Hillary, if she finally gets the nomination. Grameen will try to attract immigrant voters from South Asia in particular.

Whatever the fact is, it is by now understood that Muhammad Yunus is precisely a smart man. With world wide fame, he still can continue to proclaim himself as a 'Professor' although the claim is absolutely bogus. No one even in Bangladesh will ever raise fingers to this controversy as the media in that country is already within the grip of Yunus.