Grameen Bank founder accused of diverting millions of dollars of aid to other projects

DHAKA - Muhammad Yunus, the Bangladeshi economist and the founder of Grameen Bank who received the Nobel Prize for Peace in 2006, has been accused of diverting millions of dollars of aid money from the bank.

The bank was set up by Professor Yunus to provide micro-credit, or small loans, to the poor. The original aim of the micro-credit concept was poverty reduction, but in recent years some micro-financial institutions have been criticised over exorbitant interest rates and alleged coercive debt collection.

The BBC quoted Norwegian authorities as saying that they have no suspicions of tax fraud or corruption committed by Grameen Bank.

“Having said that, the Government of Norway finds it totally unacceptable that aid is used for other purposes than intended no matter how praiseworthy the causes might be,” Norwegian International Development Minister Erik Solheim said.

Solheim said that he had asked the Norwegian Agency for Development Co-operation for a full report on the matter, adding: “At the same time it is important to stress that we are firm believers in micro-finance as a tool in the fight against poverty.”

Meanwhile a Danish documentary maker Tom Heinemann has also alleged that Professor Yunus and his associates diverted nearly 100 million dollars of grant money to another company, Grameen Kalyan, which was not involved in micro-credit operations, the report said.

The documentary “Caught in Micro Debt” was shown on Norwegian National Television earlier this week.

“I travelled to Bangladesh, India and Mexico to find out whether micro-credit loans have really helped the poor. But I found out that poor people are getting into more and more debt because of micro-credit loans,” Heinemann added.

However in a statement, the bank said that the allegations were false, and added that it would provide a full explanation with more details at the “earliest convenient time,” the report added. (ANI)