Breaking News: Bangladesh Government Threatens Prof. Yunus with Firing

The Bangladesh Bank, backed by the Bangladeshi government, has declared that Professor Muhammad Yunus - microfinance pioneer, founder of Grameen Bank, winner of the 2006 Nobel Peace Prize, and founding board member of Grameen Foundation - has violated the country's retirement laws by staying on as Grameen's managing director past the mandatory retirement age of 60.  In addition, the central bank has said that Prof. Yunus did not get its required approval when he was appointed managing director in 1999.

The announcement was made by Muzammel Huq, a disgruntled former employee and vocal critic of Prof. Yunus whom the government appointed Grameen Bank chairman in January, at the Bank's Board of Directors meeting on Monday, Feb 28. (The country's finance minister, 77-year-old Abul Maal Abdul Muhith, has also publically called for the resignation of Prof. Yunus, who is 70, citing age as an issue.)

The Board of Directors, including the other two government-appointed members on the 12-person Board (the other nine members represent Grameen Bank's borrower-owners), rejected Huq's assertion that Prof. Yunus step down. Professor Yunus, who was present at the meeting, reassured them that he would not step down while legal review was in process.

Readers of this e-newsletter will recall that Prof. Yunus's troubles began in early December, after the airing on Norwegian TV of a biased and inaccurate documentary that alleged improper transfers of donor funds had occurred in 1996 between Grameen Bank and a not-for-profit sister organization, Grameen Kalyan. Grameen Foundation President and CEO Alex Counts commented in depth on the controversy, noting that the matter was resolved long ago and that no one had accused Prof. Yunus of personal corruption or wrongdoing.

However, the government of Bangladesh - led by Prime Minister Sheikh Hasina Wajed, who reportedly has viewed Prof. Yunus as a political rival since he looked into setting up a political party in 2007 - suddenly turned against him and the concept of microfinance (which she had formerly championed), accusing it of "sucking blood from the poor." A series of frivolous lawsuits followed, as well as irresponsible report from government-aligned media outlets, leading to the formation of support groups, including the Friends of Grameen, headed by Mary Robinson, the former president of Ireland, and including a number of other prominent supporters.  Online campaigns have been set up to support Prof. Yunus (we urge you to join!), while world leaders and diplomats have also called for the government of Bangladesh to back off of its campaign against him.

We are monitoring this situation closely, and will keep you up to date as events unfold. In the meantime, please express your support for Prof. Yunus and his principles by joining the online campaign above, signing online petitions, following Grameen Foundation and commenting on our Facebook and Twitter pages, supporting our work around the world to promote responsible microfinance, and asking your friends to do the same.

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Celebrating 14 Years of Making Dreams Come True, One Loan at a Time

This year, Grameen Foundation celebrates 14 years of providing transformative small loans and technology solutions to help struggling families break the cycle of poverty. Starting with just $6,000 in seed funding from Nobel Peace Prize Laureate Muhammad Yunus and the entrepreneurial spirit of our initial staff, and the critical donations of our supporters throughout the years, we've become one of the world's most innovative microfinance and technology-for-development organizations, helping to empower millions of the world's poor. None of our impact and growth could have been remotely possible without supporters like you, who have given generously and enabled us to expand our programs, produce measurable results, and create opportunities for the poorest people worldwide. We thank you for continuing to serve as a strong backbone for our organization.

Your commitment to our mission transforms numerous lives each year. Lives like Isabel's, a microbusiness owner we met in the Dominican Republic who says microfinance has given her a second chance at pulling herself and her family out of poverty. A few years ago, Isabel - a widowed mother of three who contracted HIV from her husband before he died - lost her colmado (a small convenience store), because she became too ill to keep the business going. But with help from microfinance institution Esperanza International, she was able to start a new store selling rice, seasoning, chicken bouillon, oil, and other products to people in her community.

You see, owning a business is the only way Isabel and other poor people like her living with HIV/AIDS in the country are able to provide for their families. "Employers will do all sorts of tests on you," she says. "If you are HIV positive, you won't get a job. If they hire you and find out you're HIV-positive, working there will be very uncomfortable."  Isabel says she is thankful for microfinance and the opportunities it has afforded her. "By starting small businesses, we can prosper."

A small amount of working capital - a microcredit loan - enabled Isabel to build a successful business, begin her ascent to financial self-sufficiency, and provide a chance at a better life for her children. Grameen Foundation is driven to make microfinance even more effective around the world, and to enable the poor to use the mobile phones they already have access to for vital information and business opportunities.  But these important strides forward in the fight against poverty were only possible because of supporters like you.  Thank you for being our partner in this important work.

In 2011, you can count on us to push harder and reach farther to find even better solutions to help the poor. Can we count on you for continuing support? Please make a gift today, and help us expand microfinance and technology to areas where people are waiting anxiously for an opportunity to break the cycle of poverty for themselves and their families.

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Program Continues to Expand the Reach of Microfinance

Although Grameen Foundation helps MFIs reach as many poor people in their communities as efficiently as possible, it's often difficult for these organizations to get the funding they need to maintain and expand their reach. But with Grameen Foundation's Growth Guarantees program, banks see qualifying MFIs as less risky, and are more willing to lend them money.

To make this program work, donor-guarantors-participants who share Grameen Foundation's vision of microfinance as a scalable solution to global poverty - provide their assets as a guarantee to a pool managed by Grameen Foundation and Citigroup. Citigroup then issues letters of credit to local banks to support financing for the MFIs that Grameen Foundation selects. On average, each dollar pledged acts as a guarantee and could yield four dollars for the MFI.  The donor funds are not actually used unless the MFI defaults on the loan, and Grameen Foundation is proud to say that this has not yet happened.

In February 2011, we provided growth guarantees worth $3.6 million dollars to three MFIs in Peru and Bolivia, which they then leveraged to generate more than $10 million in local currency financing from multiple banks. This financing is expected to help the MFIs reach more than 26,000 additional poor people.

Since 2005, with the vital assistance of our donors, Grameen Foundation's Growth Guarantees program has leveraged more than $50 million in guarantees into more than $170 million in local-currency funding for 22 MFIs around the world - enabling them to help almost 1.1 million new clients.

Read more about how Grameen Foundation's Growth Guarantees program is keeping its promise to MFIs and the poor people they serve.

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Poor Entrepreneurs Offer Local Job Services

Grameen Foundation, together with Qualcomm Incorporated's Wireless Reach™ initiative and Bakrie Telecom, has launched an Application Laboratory initiative in Indonesia, to offer such services as "Kerjalokal," or "Day Job Search," which connects Indonesia's poor to job opportunities. The initiative builds on work we began in 2009 in Uganda to create a network of micro-entrepreneurs who adopt mobile phone-based businesses - such as our Community Knowledge Worker initiative, which empowers poor, rural farmers to make up to $2 a day (effectively doubling their income) while delivering vital information to other farmers in their communities.

We chose PT Ruma - an Indonesian social enterprise that helps poor micro-entrepreneurs start businesses selling mobile-phone airtime, among other things - as a partner to support AppLab Indonesia over the long term. In the Kerjalokal  initiative, Ruma micro-entrepreneurs offer subscriptions to local job seekers, who pay 33 cents per week to receive a daily text message containing  a job listing that meets their location, their specified job category, and their preferred pay range.

Ibu Marni, a 42-year-old housewife with two children, joined Ruma nine months ago. She offers Kerjalocal to the people in her neighborhood. Just a few weeks ago, one of her subscribers successfully landed a job that they initially learned about using the service.

An estimated 47 percent of the micro-entrepreneurs who stay with Ruma for more than four months have moved above the poverty line, and more than 90 percent of the businesses are owned by women. Ruma's rapidly growing network of more than 4,500 micro-entrepreneurs has served more than 300,000 unique customers. Through your support, Grameen Foundation and its local partners are once again making a real difference in the lives of the poorest.

Read our 2009-2010 annual report to learn more about how Ruma has helped women in Indonesia earn the income they need to provide for their families and educate their children.

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Volunteer's Work in Peru is BwB "Blueprint"

Last December, Luis Baca, a J.P. Morgan investment banker, traveled from London to Peru to volunteer with Grameen Foundation's Bankers without Borders® (BwB) program. Luis's project was to assess whether Prisma, a Peruvian MFI, is using the Progress out of Poverty Index™ (PPI™) accurately.  Used correctly, the PPI can help microfinance institutions (MFIs) measure program results and track progress in helping clients break the cycle of poverty.

Luis is just one of the many volunteers helping Grameen Foundation recognize organizations complying with the new PPI "Standards of Use" certification program. Through this certification, MFIs and other PPI users receive a seal of approval signaling that they are using the tool correctly, which can help the MFI attract low-cost funding from social investors, enabling them to lend to more poor people at lower prices. In addition, the data that MFIs collect through the PPI enables them to better understand their clients and begin to develop more tailored products to meet their needs.

Luis says that he's impressed by the information that MFIs like Prisma are able to gain about their clients by using the PPI. "The PPI data showed, for instance, that if a Prisma client was in a rural area, he or she would be less likely than urban clients to default on their loan. If this client was a woman, she would be even less likely to default than a rural man. Even in those cases where rural women clients defaulted, the recovery rate shown was higher than that of male and urban counterparts."

Luis's volunteer project is the pilot for BwB's "Blueprint Projects" model - standardized projects that will help provide support and technical assistance to organizations around the world fighting poverty. BwB's goal is to have access to a specially trained reserve corps of volunteers around the world who can be matched to MFIs that request certification.

Luis' participation in this project is part of J.P. Morgan's partnership with Bankers without Borders as the program's presenting sponsor. Before joining J.P. Morgan's London office, Luis worked for a social-development not-for-profit group in Latin America. He says he's always had a strong interest in helping those less fortunate.

Work performed by volunteers like Luis is an example of a new business model for solving some of the real problems faced by microfinance and technology-for-development initiatives. Read our volunteerism white paper for more information about how use of volunteers can help improve poverty-fighting organizations' strategies and processes.

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Global Competition Sparks Exploration of Products for Islamic Microfinance Clients

Every day, poor people worldwide rely on their ingenuity and faith to provide for themselves and their families. Because their faith is very important to them, some of these people refuse financial products that don't abide by Islamic law.

The poor shouldn't have to make a choice between their livelihoods and their beliefs. That's why the World Bank's Consultative Group to Assist the Poor (CGAP), Deutsche Bank, Islamic Development Bank, and Grameen-Jameel Pan Arab Microfinance (a joint venture between Grameen Foundation and the Abdul Latif Jameel Group) developed the Islamic Microfinance Challenge 2010: Innovating Sustainable, Scalable, and Market-Driven Models, a global competition to promote the innovative design of Shariah-compliant products for Islamic microfinance clients. "There is great demand for Islamic financing and a lot of enthusiasm among financial groups globally in meeting this demand," says Julia Assaad, General Manager of Grameen-Jameel Pan Arab Microfinance.

In February 2011, Al Amal Microfinance Bank, the first in the Arab world to offer Shariah-compliant products exclusively, took home the $104,000 prize for its proposed Islamic leasing product. Operating for just more than two years, the bank has 15,000 active borrowers and 20,000 savers, and has already captured more than 25 percent of the microfinance market in Yemen.

The bank's menu of Islamic microfinance services include group and individual financing; project, corporate, and investment financing; savings; investment funds; and insurance. Al Amal will be recognized and awarded its prize during the annual Sanabel Conference in June. Competition sponsors hope the Islamic Microfinance Challenge will spark deeper exploration of ways to serve this faith-based market. This most recent competition received 130 applications from 43 countries worldwide.

Learn more about how Grameen Foundation and Grameen-Jameel Pan Arab Microfinance have worked together to support microfinance across the Middle East and North Africa region.

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Mifos Is on the RiSE

Rupaal Singh, CEO of Rural and Urban Innovative Social Entrepreneurship (RiSE), an Indian MFI, puts people at the center of his world. He knows that to reach current and potential clients effectively, he must develop his staff and tailor the MFI's products for the client.

Known around the office as "Professor Rupaal," Rupaal carves out time in his daily schedule to educate his loan officers on all the products the MFI offers. The RiSE financial product line is designed to graduate clients from product to product, as they become more creditworthy. For example, a client could graduate from a group loan an individual one, developing a good credit history along the way. The client would then transition to savings, insurance, and even investments as they climb the ladder of credit out of poverty. Rupaal says that the ultimate goal is to empower the poorest with a full arsenal of products that are currently available to the rest of the developed world.

Although RiSE emphasizes efficiency in its daily operations, the MFI still maintains paper records. Loan officers spend too much time manually recording client information, when they could be servicing current clients and recruiting new ones. But because it's part of Grameen Foundation's Mifos Consortium, RiSE is now customizing our open-source management information system to work best for the organization, developing a plan to expand their processes to reach even more poor people in the communities the MFI serves.

The efficiency that RiSE expects to gain from customizing and integrating Mifos into its daily processes will be an incredibly valuable asset as Rupaal aims to position RiSE to offer more targeted services to the poor people waiting to receive them. Now he'll be able to put even more people at the center of his world.

Learn more about how Mifos grows with MFIs and helps them expand their reach into their communities.

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Grameen Foundation, a global nonprofit organization, helps the world's poorest people lift themselves out of poverty by providing financing, technology support and management strategies to the local organizations that serve them. It also spearheads technology initiatives that create new microbusiness opportunities for the poor and improve the poor's access to health, agricultural and financial information and other services. Founded in 1997, Grameen Foundation has offices in Washington, DC; Seattle, WA; Colombia; Ghana; Hong Kong; the Philippines; and Uganda. Microfinance pioneer Dr. Muhammad Yunus, founder of Grameen Bank and winner of the 2006 Nobel Peace Prize, is a founding member of its Board of Directors, and now serves as director emeritus.