Home > microfinance india, sub-saharan africa microfinance, women and development > microfinance and political interference: is it unavoidable?

microfinance and political interference: is it unavoidable?

The founder of Grameen bank (and now ousted chairman) and 2006 Nobel prize winner is currently being referred to as a blood sucking parasite by the government of Bangladesh. A man who has accomplished such so much in this poverty-stricken nation has moved from being referred to in saint-like terms to this. We are all smart enough to see that this is political interference at its best:  a few years ago, fresh from his Nobel Prize win, Yunus made a veiled threat to set up his own political party in Bangladesh and ever since then the government (namely one Sheikh Hasina) has done everything in their power to attempt to discredit by accusing him of corruption and theft to blaming him for stealing from the poor. (8.9 Billion poor women have benefitted from Grameen’s loans in teh past 10 years!)

The question is: is politics and microfinance  indelibly inter-twined or are they no-go areas for each side? On the one hand, regulation of microfinance institutions is extremely relevant and necessary to ensure that they are operating within their stated missions and not fleecing the unbanked, but on the other hand, independence between the government and microfinance is of extreme importance as it is not suitable for governments to exercise control over credit programs as this must remain the preserve of the Microfinance sector. There are some governments that get involved once they realise how successful the microfinance programs are as they also want ‘a piece of the action’ as has been seen in some parts of Africa. One example of favourable intervention by government was a few months ago in Nigeria where the state close over 200 microfinance institutions due to poor governance practices.

As with everything, a balance is called for: character assassination and elbowing occurs as we have seen in the case of Yunus then that’s the point that one has to say to the government ‘butt out’.  The microfinance community is 100% Yunus and hope that this situation is not repeated elsewhere.

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