Grameen Bank: Social role, global legacy
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South Asia

Grameen Bank: Social role, global legacy

Bangladesh's Grameen Bank pioneered the fields of microfinance and microcredit, earning founder Muhammad Yunus a Nobel Peace Prize and helping shape the Asian financial system.

Muhammad Yunus_780

Successors have carried on the good work of Grameen Bank’s founder, Muhammad Yunus

There are two discernible eras in the life of Bangladesh’s Grameen Bank: with Muhammad Yunus and without. The first ran from 1983 to 2011, during which the Dhaka-born academic founded Grameen and pioneered the fields of microfinance and microcredit. In 2006, man and bank were awarded the Nobel Peace Prize for their efforts. The Congressional Gold Medal and US Presidential Medal of Freedom followed.

Then came the fork in the road. In 2011, government officials told Yunus he had to leave Grameen Bank, and forced him from office. Age was the official reason given. Under Bangladeshi law, no one can run a financial institution after their 60th birthday, and Yunus had just turned 70.

His supporters cried foul, calling it a coup. They wagged accusatory fingers at Sheikh Hasina Wazed, then and now the country’s prime minister. Bangladesh’s political matriarch, they said, had ousted him personally. In their eyes, she always resented Yunus’s status, believing she had earned a Nobel for her work helping to bring peace to the country’s eastern Chittagong Hills.


Hasina did little to disperse the whiff of vendetta, accusing the bank of predatory lending and called its founder a “bloodsucker”. For his part, Yunus had done himself few favours by flirting with the idea of entering politics in 2007, at the height of his global acclaim. In tribal Dhaka, with its hothouse political climate, that did not go down well.

Many feared for the bank’s future without its humble but charismatic founder and chairman. The overriding concern was that it would be used to channel funding, not to the poor and the needy, but to political causes and individuals aligned to the prime minister’s office and party.

When Yunus was ousted in 2011, Grameen Bank counted 8.3 million borrowers on its books, 97% of them poor women, and had more than $10 billion in outstanding loans.

To be fair, that hasn’t happened. Yunus’s successor Khandaker Mozammel Haque, a former head of research at the bank, carried on the good work. According to the latest official financial data, Grameen Bank reported net profit of $27.6 million in the full year 2017, up from $17.8 million in 2016 and $300,000 in 2015. Bad debts are on their way down, falling to $34.3 million in 2017, while the lender’s domestic reach is as great as ever.

Yunus’s legacy endures, in ways big and small. His genius was to realize long ago the power of the Grameen brand, and to have the courage to extend his vision of providing low-cost services to the needy into new sectors

At the end of 2017, Grameen Bank employed over 18,000 people, serving 8.93 million customers or ‘members’, up from 8.54 million five years earlier. It reaches more villages than ever, while its roster of branches is steady at 2,568, the same level it was in 2011.

“There is still an absolute need for Grameen Bank in Bangladesh, and it is doing well despite [Yunus] not being there,” says an ally of the former chairman. “There was always a risk of it losing its mission and becoming too much of a political institution, but I don’t see any evidence that has happened yet.”

Haque passed away in August 2019 at the age of 74, well past the official age of retirement. Yunus’s legacy endures, in ways big and small. His genius was to realize long ago the power of the Grameen brand, and to have the courage to extend his vision of providing low-cost services to the needy into new sectors.

Thus were born Grameen Telecom and Grameenphone, providers respectively of high-quality and cost-effective fixed line and cellular services. Grameen Fund disburses capital to SMEs, while Grameen Trust supports social initiatives.


All borrow heavily from Yunus’s guiding ethos and business principles. Each one is financially independent, letting it act quickly and decisively, according to its needs and means.

Despite this, the level of interplay and overlap within and between the Grameen family of organizations is remarkable.

The main trust, based in Dhaka, finances projects in China, India and also the United States, where the group has two well-established outposts: Grameen Foundation and Grameen America, non-profits that channel micro-loans to dispossessed Americans, many recent arrivals struggling to navigate a hostile climate.

Vidar Jorgensen, president of New York-based Grameen America, tells Asiamoney that the MFI has lent $1.2 billion to customers since opening its doors in 2008, with a 99% repayment rate.

“It proves there is a need for the Grameen model, which provides the unbanked with financial support, reduces their financial anxiety, and improves credit scores, across the world, including in developed countries,” he says.

Yunus, for what it is worth, sits on the board of both US-based Grameen companies. He may or may not have been ousted in 2011 by a vengeful prime minister, but he didn’t go far.