Posted on August 27, 2012

Bangladeshi Government Amends Grameen Bank Ordinance

The government of Bangladesh has enacted a law amending the twenty-nine-year-old Grameen Bank Ordinance that, among other things, dictates the process by which the microfinance organization appoints Muhammad Yunus' successor, bdnews24.com reports.

Under the new law, the Grameen Bank chairman will form a selection committee of up to five members, which will establish a three-person panel to appoint a new managing director from among its ranks. Grameen Bank's Nobel Prize-winning founder Yunus, 72, was dismissed from the managing director position last year on the grounds that he was beyond the country's mandatory retirement age of 60. While the government said the change was not "done to curtail or enhance anybody's power," dowser.org founder David Bornstein argues in a recent New York Times opinion article that the ruling not only "threatens [Grameeen's] independence," but also weakens the position of women, who currently represent 96 percent of the microfinance organization's membership; 75 percent of its board are village women. Under the 1983 ordinance, the government controlled only three seats of Grameen's board.

"It is very important to have the women owners have the final say in the management of their bank," Yunus told Bornstein. "It sends a very important message — they are not simply passive recipients of bank loans, they have an important voice in shaping the policies. Grameen Bank is a vital asset to these women. They have an interest in the well-being of their asset."