ISAS Briefs

The removal of Nobel Prize-winning economist Muhammad Yunus from the Grameen Bank in Bangladesh has created a deadlock in the Bank. The stalemate that is widely believed to have deep-rooted political interest is denting clients’ confidence, leading to hasty withdrawal of deposits. This can also prompt some borrowers to refuse to repay their loans, eventually defaulting on their debts owing to a ‘moral hazard’ problem repeating the recent experience in Andhra Pradesh in India. Given the Grameen’s local as well as global role in poverty alleviation through microcredit, an apolitical management with or without Muhammad Yunus needs to be restored as soon as possible, allowing the higher court to act independently. If not handled properly, the ‘Grameen contagion’ can travel well beyond Bangladesh’s boundaries.