Sun, Dec 05, 2010 - Page 5 News List

Norway reviews Bangladesh’s Grameen aid transfer

HOLY MACRO-LOAN:The transfer of about US$100 million from the bank to a separate company has raised eyebrows after being reported in a documentary

AFP, DHAKA

Bangladesh micro-lender Grameen Bank has denied any wrongdoing after Norway ordered a review of a transfer by bank founder Nobel Peace laureate Muhammad Yunus of millions of US dollars of aid money.

A documentary called Caught in Micro Debt and aired earlier this week on Norwegian television alleged cash was diverted from -Grameen Bank, which provides small loans to the poor, to other parts of the Grameen group.

The Norwegian government has since asked aid agency NORAD to “review” the transfer of nearly US$100 million of aid to Grameen Kalyan, a separate company which is not involved in micro-credit operations.

“There was no wrongdoing in the agreement between Grameen Bank and Grameen Kalyan,” Grameen Bank said in a statement released late on Friday.

The US$96 million of aid was transferred for tax purposes to enlarge funds available to -micro-borrowers and was loaned back to Grameen Bank the same day, the statement said, dismissing reports of wrongdoing as “sensationalism.”

The claims are based on a trove of letters and documents relating to the transfer, which the documentary’s director, Danish filmmaker Tom Heinemann, said he had discovered in the NORAD archives in Oslo.

The letters, which date from 1996 to 1998 — a decade before Yunus and Grameen were awarded the Nobel Prize in 2006 — show a conflict between the Norwegian embassy in Dhaka and Grameen Bank over the aid transfer.

When his actions were -challenged in the correspondence, Yunus wrote to the head of NORAD requesting the disagreement be kept quiet.

“This allegation will create a lot of misunderstanding within the government of Bangladesh. If the people, within and outside government, who are not supportive of Grameen get hold of this letter, we’ll face real problem[s] in Bangladesh,” he wrote, according to a copy posted online.

Following the objections by the Norwegian embassy, “all the -donors money was transferred back,” Grameen said in its statement, adding there was “nothing secretive about [the transaction]. It was a matter of honest disagreement.”

Heinemann said that he had not accused Yunus of personally benefiting from the transfer.

The allegations come at a time when the micro-finance industry is already under fire both in Bangladesh, which has capped micro-lending interest rates following criticism of excessive profits, and neighboring India.

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