Dr. Yunus: Friend or foe?

[zakirc]

Once again, I'd like to add, I am not trying to compare Dr. Y with BNP or BAL people. At the same time I am concern that we might fall into a situation like what some Iraqi's are facing today, they they would be better off by throwing away Saddam and now they are facing a country about divided into 3. (Figure out the metaphor) Our natural resources are very lucrative to rest of the world, and we have already seen how far they will go to have control on these.

[cricket_pagol]

Originally Posted by zakirc
Thanks Sujan for the article. It is a good one and I completely agree.

I heard a story from a relative who worked in Grameen Bank for over 10 years. He once said a story,

During the early days of operation GB officers would go to villages and offer loan. Next morning loan-seekers were all gathered in a field and asked to perform a set of exercises such as sit-ups etc. The objective of this was drive away the well-off people who were there to take a chance. This system worked like magic for them. Coupled with this, by creating borrower groups, each depending on the repayment performance of the remaining members of the group, GB ensured a monitoring system within each group. Such techniques definitely is a requirement for the success of micro-credit.

While I liked these steps of GB, I could never accept its 30% + rate of interest. The links that I posted gives some insight into that aspect. Also, I still fail to understand how a person who invented a supposedly magical economic development model, gets the nobel prize fro peace?

To me it all looks like a master plan to create an automatic choice for Bangladesh people since where the country was heading was clear since early/mid 2006.

If you believe in too much conspiracy theories, you will fail to see the obvious. Is it likely that the noble committee will give the noble prize to Yunus so that he has a long shot chance of becoming the prime minister of bangladesh. Once Yunus is the president, they will be able to control bangladesh's resources which is one of the best in the world. I would say wake up dude!!! There are many other countries who have more natural resources than bangladesh. Beside all the energy deals that previous governments have done has (in general) gone against national interest because people who were in charge handling such affairs were corrupt. I think the resource hungry conspirators are better off with a corrupt government in BD because they can get the "deal" they want by paying the bribes. That is exactly what is happening with the power station deals with shady companies. This is unlikely to happen with yunus in power, because he has no history of corruption and he does not represent a lobby because grameen bank has never needed any foreign assistance. Think simple!!!

Some info that people often overlook about interest rates (the education loans and housing loans are like regular banks).

Grameen Interest Rates
http://www.grameen-info.org/bank/GBGlance.htm
Government of Bangladesh has fixed interest rate for government-run microcredit programmes at 11 per cent at flat rate. It amounts to about 22 per cent at declining basis. Grameen Bank's interest rate is lower than government rate.
There are four interest rates for loans from Grameen Bank : 20% (declining basis) for income generating loans, 8% for housing loans, 5% for student loans, and 0% (interest-free) loans for Struggling Members (beggars). All interests are simple interest, calculated on declining balance method. This means, if a borrower takes an income-generating loan of say, Tk 1,000, and pays back the entire amount within a year in weekly instalments, she'll pay a total amount of Tk 1,100, i.e. Tk 1,000 as principal, plus Tk 100 as interest for the year, equivalent to 10% flat rate.

I don't know where you got the 30% interest rate figure!!!

[Sauron]

Originally Posted by zakirc
While I liked these steps of GB, I could never accept its 30% + rate of interest. The links that I posted gives some insight into that aspect.

When GB first started, Bangdesh Bank did not give it any financial guarantee because it's customers are poor (equivalent low poor credit or low FICA score). GB went ahead and build a business. It is not a charity organization, it is a business. They need to make profit, pay employees, expand the business.

I agree, 30% is steep. But compared to the traditional "mahajan" lenders, it is very reasonable.

Also, I am fairly hopeful that as the grameen conglomoration grows, they can slowly lower the interest rate.


.

[cricket_pagol]

I just want to add one more thing.

Fact: Grameen Bank has helped millions of poor to get our of poverty
Critics: GB charges high interest rates, rips off poor people.

May be it charges high interest rate. Why don't you shown another working model which removes poverty in a similar scale. My view, if you cannot provide a successful alternative model then your criticism is lame. I don't know he does not lower the interest rate, but the reality is that he has helped millions of people to get out of poverty. This is a successful business model... you have to make profit to make this business of helping the poor viable.

[zakirc]

Originally Posted by cricket_pagol
Grameen Interest Rates
http://www.grameen-info.org/bank/GBGlance.htm
Government of Bangladesh has fixed interest rate for government-run microcredit programmes at 11 per cent at flat rate. It amounts to about 22 per cent at declining basis. Grameen Bank's interest rate is lower than government rate.
There are four interest rates for loans from Grameen Bank : 20% (declining basis) for income generating loans, 8% for housing loans, 5% for student loans, and 0% (interest-free) loans for Struggling Members (beggars). All interests are simple interest, calculated on declining balance method. This means, if a borrower takes an income-generating loan of say, Tk 1,000, and pays back the entire amount within a year in weekly instalments, she'll pay a total amount of Tk 1,100, i.e. Tk 1,000 as principal, plus Tk 100 as interest for the year, equivalent to 10% flat rate.

I did the math of GB back in 1996 when I was student of Finance & Banking. And I am pretty sure that we arrived at an effective rate of somewhere around 34%. Maybe there are a few service charge type items that you overlooked, or maybe they have reduced the rates after being forced to do so by the Govt.

I will take a fresh look into your link when I am free.

Regarding your conspiracy theory talk, all I can say is that I am the kind who don't accept all the garbage the media feeds us.

For example, whatever you say, I really don't believe that an aeroplane crashed in the pentagon on 9/11, I watched TV news 100% of my free time those days (5-8 hours a day) and I do not remember seeing any aeroplane debris in any video of the Pentagon crash site. An Aeroplane cannot evaporate from an accident, it simply can't. Yet, most people has accepted the lie the US Govt. and the channels have fed us. Most people also believed Iraq had WMD (Even a suspicious person like me was reasonably convinced by the overconfident talks of the greatest liars on earth).

I like to make my own judgment, wherever I have sufficient information to reasonably make a judgment and with regard to GB, I already studied it, so did one other fellow member of this forum who was my classmate, and with regard to Pentagon incident, i believed what I saw with my own eyes.

[Miraz]

I don't mind anyone charging 30% and effectively assisting to change the fate of people compared to someone charging 15% but not reaching or not willing to reach poor people.

Its easy to criticize swimming pattern from land.

[zakirc]

Originally Posted by Sauron
When GB first started, Bangdesh Bank did not give it any financial guarantee because it's customers are poor (equivalent low poor credit or low FICA score).
.

"With the sponsorship of the central bank of the country and support of the nationalized commercial banks, the project was extended to Tangail district (a district north of Dhaka, the capital city of Bangladesh) in 1979. With the success in Tangail, the project was extended to several other districts in the country. In October 1983, the Grameen Bank Project was transformed into an independent bank by government legislation." SourceThis legislation also means Bangladesh Bank's support.

[cricket_pagol]

Originally Posted by zakirc
Regarding your conspiracy theory talk, all I can say is that I am the kind who don't accept all the garbage the media feeds us.

For example, whatever you say, I really don't believe that an aeroplane crashed in the pentagon on 9/11, I watched TV news 100% of my free time those days (5-8 hours a day) and I do not remember seeing any aeroplane debris in any video of the Pentagon crash site. An Aeroplane cannot evaporate from an accident, it simply can't. Yet, most people has accepted the lie the US Govt. and the channels have fed us. Most people also believed Iraq had WMD (Even a suspicious person like me was reasonably convinced by the overconfident talks of the greatest liars on earth).

I like to make my own judgment, wherever I have sufficient information to reasonably make a judgment and with regard to GB, I already studied it, so did one other fellow member of this forum who was my classmate, and with regard to Pentagon incident, i believed what I saw with my own eyes.

This is separate topic involving international conspiracy theory. You have to judge conspiracy theory by it's merit. There is a thread in BC about it. My belief on this is, 9/11 twin tower crash was done by controlled demolition. There are couple of excellent videos on the internet which demonstrates this theory... you should have a look at it.

It will take a long time to play these videos but they are worth watching
http://video.google.com/videoplay?do...14675910247150
http://www.youtube.com/watch?v=Vd1-Dp_-7WI
Also, search for 9/11 controlled demolitions

[cricket_pagol]

Originally Posted by zakirc
"With the sponsorship of the central bank of the country and support of the nationalized commercial banks, the project was extended to Tangail district (a district north of Dhaka, the capital city of Bangladesh) in 1979. With the success in Tangail, the project was extended to several other districts in the country. In October 1983, the Grameen Bank Project was transformed into an independent bank by government legislation." SourceThis legislation also means Bangladesh Bank's support.

Dr. Yunus did not get the support he wanted from Govt. That's why Grameen bank grew very slowly based on it's own fund. There are many articles which talk about the start of Grameen bank.

[Sauron]

Originally Posted by zakirc
"With the sponsorship of the central bank of the country and support of the nationalized commercial banks, the project was extended to Tangail district (a district north of Dhaka, the capital city of Bangladesh) in 1979. With the success in Tangail, the project was extended to several other districts in the country. In October 1983, the Grameen Bank Project was transformed into an independent bank by government legislation." SourceThis legislation also means Bangladesh Bank's support.

Did you deliberately omit the period from 1976 to 1979?

Or do you not understand the phrase "in the beginning"?

Obviously you are smart and obviously you don't share the excitement that some of us are feeling at Dr Y's political ambitions. But don't fudge facts. Bangladesh Bank did not want to support Grameen initially. They played "Dudher Machhi" role. As far as I know, for the first 3 years Grameen had to operate without financial gurantees from Bangladesh Bank.

After three years of Dr Y being in the politics, we may see many other such Dudher machhi. But this is the time when he needs the support most.

[zakirc]

Originally Posted by Sauron
Did you deliberately omit the period from 1976 to 1979?

Or do you not understand the phrase "in the beginning"?

Obviously you are smart and obviously you don't share the excitement that some of us are feeling at Dr Y's political ambitions. But don't fudge facts. Bangladesh Bank did not want to support Grameen initially. They played "Dudher Machhi" role. As far as I know, for the first 3 years Grameen had to operate without financial gurantees from Bangladesh Bank.

After three years of Dr Y being in the politics, we may see many other such Dudher machhi. But this is the time when he needs the support most.

As far as I understand, the first three year you are referring to was the Jobra Village period. During that time Dr. Y's project was still under testing, you cannot expect the central bank to financially back test projects conducted by every University professor. If thats being "dudher machi" for a central bank, I want Bangladesh Bank to remain the same ... lolz.

[shujan]

Zakirc talk is cheap! Making things happen is heard. It is easy to criticize a segment of a plan and feel like omnipotent about yourself. 58% Grameen bank borrowers escaped poverty. Grameen Bank give millions of dollar interest free loans to beggars. Which other moral institution do that? Religious billionars spent billions to make war while thrusting poverty among common people. Talkers do not help the situation they create confusion only.

[zakirc]

Originally Posted by shujan
58% Grameen bank borrowers escaped poverty.

Source please. I mean some source outside GB.

[shujan]

moving on.