Politics spoils microcredit results, Grameen boss tells CPM mayor

Kolkata, Bangladesh, December, 29 2007 - Nobel laureate Muhammad Yunus, the chairman of Bangladesh’s Grameen Bank, said micro-credit systems can weaken if Politics comes into play.

“If the flow of micro credit is through a political mechanism then repayment is very difficult. Because then people start asking when I am going to vote for you, why do I need to repay the money?” said Prof Yunus.

Yunus was replying to a question posed to him by Kolkata’s CPI(M) mayor Bikash Ranjan Bhattacharya just before he was to deliver a lecture on ‘Impact of Micro Insurance in Rural Healthcare in Developing Nations’. The lecture was organised by the Asia Heart Foundation of renowned cardiac surgeon Dr Devi Shetty.

Bhattacharya had asked Prof Yunus to provide a possible explanation to the lack of enthusiasm among people here regarding micro credit initiatives taken in and around Kolkata and also whether there was any force involved in recovering loans given to the poor through the micro credit mechanism in Bangladesh.

When asked about his views on acquiring land for industry, Prof Yunus told reporters that the process could be made smoother by making people a part of the development process. Prof Yunus said that giving shares of the new company to farmers could be one of the ways of achieving this as that would inculcate a sense of belonging in the farmers towards the company. “The farmers would feel that this was their company and willing give the land,” he said.

Commenting on Bangladesh’s Economy, he said that, given the current trend in Bangladesh, the country would be able to achieve ‘zero’ poverty by 2030.

Reflecting on the success of Grameen Bank, he said that the bank has a CDR or credit-deposit ratio of 150% of the loan outstanding as of date.

“Today I can proudly say that the depositors of the bank are collectively strong enough to buy out the biggest company in Bangladesh in a day,” he said. Grameen Bank has 74 lakh depositors and 2500 branches all over Bangladesh at present.