Grameen Bank and the facts by Yunus Centre

Questions by critics on Grameen Bank and the facts by Yunus Centre

A debate is now ongoing on the performance and legal standing of Grameen Bank, and the role played by its founder,

Prof Muhammad Yunus. Yunus Centre has compiled a set of frequently asked questions and provided answers to them. The Daily Star reproduces, in installments, the full document for the sake of informed public opinion on this vital issue that has attracted tremendous national and international interest.

Q1: Why is there such resistance and criticism of the government's move to investigate Grameen Bank? Is Professor Yunus above the law for being a Nobel Laureate?

Answer: Generally, when serious allegations of corruption are widely raised against an organisation only then is the organisation investigated. There have been no such cases against Grameen Bank. Grameen Bank is well known in the country as being a corruption-free institution. Every year Bangladesh Bank has closely audited the Grameen Bank. Two internationally recognised audit firms have also been auditing Grameen Bank. No audit team has ever brought forth any issues of irregularity. On the other hand, the head of the government has been directly and indirectly making various hateful comments against Grameen Bank and Professor Muhammad Yunus in the parliament, outside the parliament and in the international media. Keeping in view these comments, isn't it only normal to doubt the intentions behind the investigation? Wouldn't such comments affect the investigation? Only because of these have distinguished personalities of the civil society expressed their concerns and not for any other reason.

Professor Yunus is not above and beyond investigations by being a Nobel Laureate. Those who have objected to the investigation have only done so because of the hateful comments and the motivated intentions behind them.

At the time of taking oath the Honourable Prime Minister and the Ministers vow: "I will preserve, support and secure the constitution, and will lawfully and properly behave with all, without fear or favour, and without love or hatred." It is the behaviour that is worrisome not the investigation. Is it not a duty of all citizens to protest the exception that is taking place in the case of Grameen Bank?

Q2: Grameen Bank is a government bank. As the managing director of a government bank, Professor Yunus is a government employee. Why didn't he abide by the rules and regulations of the government?

Answer: The issue of Grameen Bank being considered as a "government bank" has only been raised by the current government. No previous government, even when the current regime was previously in power, had ever claimed such a thing. Grameen Bank has been operating as a private bank since 1990. Now these previous notions have been turned around using verdicts from the higher courts. The reasoning that is being mentioned for the current claim is that Grameen Bank was established through a government ordinance and that makes it a government institution.

In 1990, through amendment to the Grameen Bank Ordinance, the government, Bangladesh Bank, and Grameen Bank considered that Grameen Bank had become a non-governmental organisation and it started operating accordingly. No one objected to this. Ministry of Finance, Bangladesh Bank, external auditors -- no one raised any questions regarding this.

Not only was the ownership of the bank transferred to the majority private shareholders (currently owning 97%), the entire responsibility of managing the bank was also given to the Board of Directors.

One characteristic of any government entity is that it must take approval from the government for making its rules and regulations. This provision was eliminated in the 1990 amendment of the Grameen Bank Ordinance.

On public interest the government may give various directives to any government entity from time to time. This was revoked from the Grameen Bank Ordinance.

As a result, Grameen Bank has been operating under private ownership and governed by the rules and regulations approved by its Board of Directors. The employees of the Grameen Bank work under the service rule of the Bank (as outlined and approved by the board). The Board of Directors sets the salary scale and benefits for the employees. In most cases these are completely different from the government institutions. For example, any employee can retire with pension and gratuity after ten years of service. Neither the Ministry of Finance nor the Bangladesh Bank has ever raised any question regarding this. All powers of this organisation have always been with the Board of Directors. The government has relinquished all powers by itself. This is the reason why Grameen Bank has been able to continue on its course of success.

The Board appoints the Managing Director (MD). The power has been vested upon it by law. The rules and regulations outlining the appointment and duties of the MD are there in the Grameen Bank Ordinance. By law, the MD is appointed under a contract with conditions set by the Board. There is no age-limit for the appointment.

We can give an example of another organisation that was created under a special ordinance like Grameen Bank, and that is the Asian University of Women (AUW). AUW, located in Chittagong, was created under a special law passed in the Parliament. Similarly, Grameen Bank was created under a special ordinance. AUW is not a government organisation. Its employees are not government employees. Its vice chancellor is not a government employee. The VC does not have to follow the rules and regulations of the government universities.

There can be academic discussions about whether Grameen Bank is a government bank or not. The main point is it has run as a private bank till 2011. Grameen Bank could achieve success in its work because there was no doubt about its being private on the part of the government, Bangladesh Bank and Grameen Bank. If it is asked to take the identity of a government bank and thus change its character, then it will be destroyed.

If the legal experts think that according to the existing law there is no way that Grameen Bank can run as a private bank, to run this as a private bank till now was a mistake, then the law should be amended to fully make it a private bank. It cannot run in any other way.

If such law amendment is made then Grameen Bank can continue as a strong sustainable bank. This is needed for the national interest. If it is made a government bank, it will fail.

Q3: Grameen Bank operates with funding from the government. Besides this, it also receives millions in foreign funding. Is it not the responsibility of the government to review how these funds have been used?

Answer: Grameen Bank does not operate with funding from the government. Even before the Bank was established every attempt was made to establish it with full ownership of its members. The then government did not agree with this. At the time of its establishment in 1983, the government claimed 60% ownership of the Bank. Professor Yunus did not agree with establishing Grameen Bank with 60% ownership of the government. It was reasoned to him that once the Grameen Bank was operational it would be left to the private sector. It was done so in 1986. The government divested its majority ownership by amending the Grameen Bank Ordinance and transferring 75% ownership to the members. Professor Yunus continued with his effort of bringing down the government's stake to a token 5%. As a result of which, in 2008, the government holding was reduced from 25% to 15% by amending the ordinance. Since the current government hadn't placed this as a bill and then passed it as a law, its share went back to being 25%.

When Grameen Bank was established, the government of Bangladesh bought GB shares worth Tk. 1.20 crore. Sonali Bank and Krishi (Agricultural) Bank each bought shares worth Tk. 30 lac, totaling Tk. 60 lac. So the government's investment went up to Tk. 1.8 crore. Since its inception the government hasn't invested beyond this Tk. 1.8 crore. Since the government did not increase its paid up capital its share got reduced to 3%.

At the request of the government of Bangladesh, at times Grameen Bank had to take loans and receive grants from various foreign sources. Grameen Bank was pressured to take loans and grants from foreign sources at various times. This has been widely documented in various publications. The foreign loans have been repaid as per the agreed schedule. Grameen Bank has never defaulted even for a day in repaying its loans.

In 1995 Grameen Bank decided that it will no longer accept any new foreign loans or grants. The ongoing loans and grants continued until 1998. Since then, Grameen Bank has not taken any foreign loans or grants. Grameen Bank has never taken any grants from the Bangladesh government.

The source of paid-up capital of Grameen Bank is the funds received from the members who have purchased a share in the Bank. The price of each share is Tk. 100. As the government had set the ceiling of paid-up capital in 2008, Grameen Bank could not offer any member more than one single share. Since Grameen Bank pays a dividend of 20% to 30% on each share, the members want to purchase more shares.

Q4: Are all eight million members of Grameen Bank genuine shareholders? Or is it all made-up?

Answer: Majority of Grameen Bank members are shareholders of Grameen Bank. The number of members who have bought shares stands at 5.5 million. There are currently 8.4 million members in Grameen Bank. Those who have not yet purchased a share will eventually buy one. There is no rush or pressure to do this. Collectively, the members own 97% of the shares of Grameen Bank. If more members buy shares, the ownership stake of the members will surpass 97%.

The price of each share of Grameen Bank is Tk. 100. If a member saves Tk. 100 then a share worth Tk. 100 is purchased. In the member's Pass Book this transaction is written down as a deposit of Tk. 100 recorded under the share account. After this, the member's name is listed on the Share Holders' Registry. The voter list for the election for membership in the Board of Directors is compiled from the Share Holders' Registry.

Q5: If there are shareholders why have they never been paid any dividends? Has the money from the profits been embezzled by Professor Yunus and his accomplices?

Answer: The Grameen Bank has always been paying dividends to its shareholders.

The members of Grameen Bank may buy a Grameen Bank share worth Tk. 100 any time. 5.5 of the 8.4 million members have already bought shares. By purchasing shares worth Tk. 55 crore they have become owners of 97% of the paid up capital. The government and government banks have become owners of 3% by buying shares worth Tk. 1.8 crore.

So far, the Grameen Bank has provided the government Tk. 2.52 crore in dividends for their investment of Tk. 1.2 crore, they have also given Sonali Bank and Krishi Bank Tk. 63 lac in dividends for their investments of Tk. 30 lac each.

The members have been paid Tk. 77 crore in dividend against the Tk. 55 crore worth of shares they bought (the members have received comparatively less because those who have purchased shares after 2006 have received dividends for a shorter period of time). Delivery of dividend to each member is ensured every year.

At the time of approving the Annual Budget at the Annual General Meeting (AGM), the Board of Directors decides how the annual profits will be distributed. The Board decides what percentage of the annual profits can be distributed among the shareholders as dividends. From its inception till 1996 the fund was not big enough to give dividend to shareholders. From 1997 till 2005, in order to comply with government orders dividends could not be provided. Grameen Bank had to fulfill the government's condition of making deposits to the Emergency Mitigation Fund in order to qualify for tax exemption and therefore dividends could not be provided in this period. Since this condition was revoked in 2006, dividends of 100% in 2006, 20% in 2007 and 30% in 2008, 2009 and 2010 were paid accordingly. If the profit is less, then funds are taken from the Dividend Equalization Fund to increase the per-share profits. In cases when profits fall, in order to maintain a constant rate of dividend distribution a Dividend Equalization Fund was formed. Till 2010 an amount of Tk. 69.46 crore has been deposited in this fund.

Since Professor Yunus or his colleagues do not own any shares of Grameen Bank they did not receive any dividends. They only got paid their salaries as Grameen Bank employees. This is all they received.

Q6: Professor Yunus served as Managing Director of Grameen Bank despite government's rule for retirement age limit of 60 years. Is it not illegal? Receiving salary and allowances for this additional period, is it not illegal too?

Answer: The government's ownership in Grameen Bank was reduced to 25% from 60%, and the ownership of Bank members was raised to 75% from 40% after an amendment in Grameen Bank ordinance in 1990. Under the new ordinance, the authority of appointing the MD was vested to the Board of Directors with prior approval from Bangladesh Bank as the government's ownership was reduced. According to the provision in the amended ordinance, a request letter was sent to Bangladesh Bank on 14-08-1990 for their prior approval to appoint the chairman of the Grameen Bank Board of Directors and Professor Muhammad Yunus as the MD. In a letter of 25-08-1990, Bangladesh Bank provided their prior approval to appoint Professor Muhammad Yunus as the MD of Grameen Bank. In the approval letter, Bangladesh Bank did not mention any age limit to appoint Professor Muhammad Yunus as the MD. Accordingly, he was appointed as the MD without mentioning any age limit as Bangladesh Bank never mentioned age limit in any of their letters or prior approval. In the 52nd Board of Directors meeting of Grameen Bank that was held on 20-07- 1999, Professor Yunus, as the functioning MD, voluntarily informed the Board regarding his retirement age. The Board of Directors decided that he will continue as MD until the Board takes any other decision.

In the same Board meeting it was decided to develop a regulation for appointing the MD. In the regulation, no age limit was imposed for the position of MD. In an audit-based detailed inspection report of 31-12-1999, Bangladesh Bank raised an objection that approval was not obtained from the Bank to appoint Professor Muhammad Yunus as MD. A joint meeting was held on 15-01-2001 in presence of 3 officers each from Bangladesh Bank and Grameen Bank to discuss a few unresolved issues those were revealed in an Audit and Inspection report of Bangladesh Bank in 1999. The issues were discussed and some of them were resolved. It was also decided in the meeting that the remaining issues would be considered as resolved after Grameen Bank submitted a few particular documents. Accordingly, Grameen Bank submitted a supplementary report 16-01-2002 along with all the documents to Bangladesh Bank as decided in the joint meeting. Bangladesh Bank considered the issue of MD's appointment resolved after reviewing the documents received from Grameen Bank. Professor Muhammad Yunus was 61 years and 6 months at that time. During the time his age exceeded 60 but Bangladesh Bank never asked for post-facto approval. Later on Bangladesh Bank never raised this issue in any of their detailed inspection reports.

It is to be noted that Professor Yunus exceeded 60 years of age during the last tenure of Awami League government in 2001. But the government never raised the issue of Professor Yunus's age

Bangladesh Bank never raised the issue in the next 11 years. But the issue was raised in 2011. At this point Dr. Yunus submitted a Writ Petition to the High Court. The Court refused to accept the petition for hearing on the ground that he does not have Locus Standi, which means he is not eligible for submitting the petition. He appealed to the Appellate Division but his appeal was refused on the same ground.

At this point Professor Muhammad Yunus resigned from the position of Managing Director of Grameen Bank.

Was it a crime for him to perform his duties properly for the next 11 years, or was it a crime committed by those who appointed him or was it a crime of Bangladesh Bank who approved his appointment as MD? This needs to be resolved.

Q7: How many elected female representatives are there in the Grameen Bank board? Who are they? How do they come to the board?

Answer: According to the laws governing Grameen Bank there are nine elected members in the board. The election process within Grameen Bank is specified in the Grameen Bank Election Rules. The members of Grameen Bank are divided into nine constituencies. The election is held in three tiers in each of these constituencies. An election commissioner conducts these elections. Returning officers and polling officers are appointed. The voter list is published. Only those who acquire shares of the bank get enlisted in the voter list.

A single representative is elected from each tier. The elected representatives of the first tier become the voters for the second tier. One representative is elected in each of the second tiers. Representatives of the second tier constitute the council of representatives in the third tier. Council member elected in the third tier is the representative in the board from that particular constituency. The one who gets elected as a member of the board has to get elected in each of the three tiers including the final one. The one who becomes a member of the board has to come through a rigorous election procedure. The voters elect representatives in each tier by carefully assessing different attributes of each of the candidates.

A proof that the members of Grameen Bank are very well accustomed to the election procedures is that 13 Grameen Bank members have been elected as chairmen and 4,022 Grameen Bank members have been elected as members in the last Union Parishad Election. In the Upazilla elections, 98 members got elected as women vice chairmen and one member contested independently against a male candidate and won the position of vice chairman. Additionally, one got elected as a Pourasabha chairman and 148 as Pourasabha councilors.

Apart from this, amongst the families of Grameen Bank members, 47 were elected as chairmen and vice chairmen, and 248 as councilors.

These statistics are only of those who have been elected. The figure of those who have contested but have not won is much higher.

Grameen Bank members are closely attached and involved with the election and leadership process. Those who are trying to depict them as uninformed helpless women are completely wrong.

Q8: Are not the women who are elected to the Board of Directors of Grameen Bank puppets in the hand of Professor Yunus? Do they have any actual role in the Board?

Answer: Routine issues come to the Board for decisions. There is no need for decisions on loan proposals at the Board level. Such issues are settled at the branch and area office level. The Board handles issues of planning, policy proposals and budget. At Board meetings, Board members openly discuss, question, state their opinion and express their satisfaction over all issues being discussed. Many Grameen Bank policies have been changed and many have been formulated on the basis of the opinions of the elected Board members.

The elected members provide the vigour to the Board. In order to satisfy them, the chairman and government representatives make sure that all issues are jointly discussed and decided upon.

The Board has a total of 13 members of which the chairman and two secretary ranked officers serve as members of the Board. To date, no decision has been taken on the basis of a vote. Decisions are taken after reaching a consensus.

From the very beginning, a learned and respected individual has served as the Chairman of the Board of Directors of Grameen Bank. According to the Grameen Bank ordinance provisions made thus far, and the gazette relating to the Election of Grameen Bank Directors, it has been ensured that the representatives in the board are elected in a transparent manner from among the shareholders; and they have been fulfilling their duties accordingly. Presence of the nine shareholder borrowers of Grameen Bank creates a distinctive environment for discussion. Views can be exchanged and various discussions relating to the operations of the bank can be held with them; no one else in the world possesses such grassroots knowledge and expertise. They are the direct owners of the bank. They are directly affected by the decisions taken in Grameen Bank. Their lives are tied to Grameen Bank. Their presence compels the discussion to be life-oriented.

From the very beginning the chairman, government-nominated directors and the board representatives elected from the borrower-shareholders of Grameen Bank have all played a vital role. One has to remember that it is through their capable management that it was possible for Grameen Bank to achieve a Nobel Prize. When they formulate a policy, pass an order and go back to their respective villages, they know very well if their policy decisions have not pleased the members of Grameen Bank of their village and of the villages around them, they will be under pressure. That elected representative is alone in front of the others. They live with the other members and attend weekly meetings with them. The elected representative will never do anything to aggravate the others.

Q9: Hasn't Grameen Bank been extorting money from poor people through very high interest rates just like the money lenders?

Answer: Of all microcredit organisations, governmental or non-governmental, Grameen Bank's interest rate is the lowest. The highest rate of interest in Grameen Bank is 20%. This is a simple interest. The interest rate is set with a diminishing interest rate method, which at a flat rate comes to 10%. Bangladesh Microcredit Regulatory Authority (MRA) has set the highest interest rate for any microcredit institutions to be 27%, which is 7% higher than Grameen Bank's rate.

Grameen Bank's Housing Loan has a yearly rate of 8%. Grameen Bank also has a Higher Studies Loan programme, which during the period of education is 0% (i.e. no interest) and after completion of studies is 5%. Loans given to beggars have an interest rate of 0% (in other words no interest is charged). Grameen Bank's interest is the lowest among all the microcredit institutions of Bangladesh, and it gives the highest interest on the savings (ranging from 8.5% to 12%).

All of this information has been available in various policy publications and the website of Grameen Bank for a long time now. This information is known to Bangladesh Bank and other relevant regulatory authorities as well. Yet a lot of well known and responsible people take freedom to mention in the media imaginary higher interest rates as they please. This is very unfortunate indeed.

It should be mentioned here that even after the retirement of Professor Muhammad Yunus from Grameen Bank in 2011, the interest rate charged and collection methods of Grameen Bank have remained unchanged.

Q10: Aren't the members of Grameen Bank being oppressed by forcing them to create a saving in a compulsory manner?

Answer: Grameen Bank started with a policy of compulsory savings. Over time the amount of compulsory savings was reduced. Since the members were encouraged themselves to save, the compulsory savings scheme was eventually abolished. Now savings is no longer compulsory in Grameen Bank. From the very beginning Grameen Bank has provided an interest of 8.5% to 12% on savings (Microfinance Regulatory Authority has set 6% to be the lowest interest on savings for all microfinance institutions). The members of Grameen Bank are thus encouraged to save more and more. For example, members show a lot of enthusiasm in the pension fund savings. They get a return of 12% on this. Their savings grow faster. Many members save in single long-term schemes. The money being saved can be withdrawn at any time, even on the day after they have deposited it. Currently the total value of saving by Grameen Bank members is Tk.7,000 crore. Where there is no scope for compulsory savings, how does the issue of oppression through forced savings arise?

Q11: Haven't many women committed suicide due to failure of repayment of Grameen Bank loan installment? Haven't many left their homes? Aren't many women in hiding after leaving their villages and homes?

Answer: A member of Grameen Bank may commit suicide, may be in hiding or on the run, or may be working as a house maid somewhere. But it would be incorrect to think that they have had to do so because of Grameen Bank.

Why would a member of Grameen Bank be on the run? Have they ever been tortured by Grameen Bank? Have they ever been handed over to the police? Has Grameen Bank ever filed any cases against them? In the 35 year history of Grameen Bank, has anybody ever heard Grameen Bank file any case against anyone? Though the government has given the authority to Grameen Bank to file certificate cases against loan defaulters, Grameen Bank has never applied that authority against anyone.

There is an allegation against Grameen Bank by bankers that it reschedules the duration of loan so that the borrowers are not treated as 'loan defaulters.' This is true. Grameen Bank never refuses to reschedule loans. This is a part of the main philosophy of Grameen Bank. Grameen Bank believes in the honour of people, particularly that of the poor.

Based on experience, Grameen Bank has found that poor people default more frequently due to the circumstances they find themselves in rather than default willfully. Their loans are rescheduled and new loans are provided to recover the lost capital. Each time the duration of loan is extended, provisions are made for an amount equaling 50% of due loan, meaning this amount is treated as expenditure. Thus, no matter what the arrangement is with the member, the financial disclosure of the bank remains transparent and conforms to international standards.

So why would a borrower be in hiding if she is not a defaulter?

Another thing to be kept in mind is that in addition to being a borrower a member is also a regular depositor. She has enough money in her savings account to repay the installment. Then why would she be on the run for not being able to pay installments?

There are many problems in the lives of poor women. Bangladesh is one of the countries that rank highest in violence against women. A woman may commit suicide due to various reasons. But there is no reason to commit suicide due to Grameen Bank. The explanation has been provided above. In the past 35 years not a single case has been filed or no one handed over to the police for failing to pay an installment. The reason behind the suicide will be clear if one checks the deposit balance of the deceased. Generally it is observed that there is a larger amount deposited than borrowed in the account of the deceased borrower. Can this be an indication of people committing suicide for not being able to repay loans to Grameen Bank?

Q12: Didn't Professor Yunus keep Grameen Bank out of tax nets using different schemes and wasn't he severely criticised because of this?

Answer: With the assistance from government and until 2012, and in the interest of the poor women, Professor Yunus was able to keep Grameen Bank out of the tax nets. In 2010-11, he was severely criticised for this move. In 2010, the government no longer agreed to keep the tax exemptions in place. Ignoring appeals, in May 2011, the government compelled Grameen Bank to pay advance taxes of 10 crore taka. Once Professor Yunus left Grameen Bank, the government again granted tax exemption status to Grameen Bank for the period 2011 to 2015. Yet this time there was no storm of criticism.

Q13: Isn't Grameen Bank performing better since Professor Yunus's departure? Haven't the interest rate and the repression of borrowers lessened since then?

Answer: Due to the innovative decentralised management practices introduced by Professor Yunus, there has not been any short-term crisis in management in Grameen Bank since he left. There is no reason for such a crisis. Grameen Bank is still diligently following the same interest rate, operational practices, loan disbursement, repayment collection, etc. as per the policy and practices innovated by Professor Yunus.

Those who are currently running Grameen Bank have all been trained by him. The interest rate is just as it was when he was there; there has never been a case of repression, nor is there now. Hence there is no question of reducing repression.

But the long-term prospects are different. Central leadership and decision-making are very important for long-term success. If the central leadership makes the wrong decision or sets the wrong policies it may lead to disaster.

Q14: Who own the companies named "Grameen?"

Answer: Most of the Grameen companies are registered under the Section 28 of the Company's Act. Companies formed under this act have no owners. No one is able to personally take out profit. The law terms these companies as "Non Stock Company limited by Guarantee." The directors of these companies provide personal guarantees but are not allowed to take profits.

Some companies are registered as "for-profit" companies. These are owned by a few of the non-profit companies mentioned above. As a result the profit from these companies goes to the non-profit companies, and can never go to an individual.

Q15: Don't the 54 companies belong to Grameen Bank that have the name "Grameen," and have used Grameen Bank's money and reputation?

Answer: The 54 companies that have the name Grameen have received no investments from Grameen Bank. The capital contribution for these companies has come from different sources. Capital for many of these companies has come from contributions from donor institutions. For some it has come from loans. Others have had investments from other companies. None of the organisations have accepted investments from Grameen Bank.

The source of funding, utilisation of the funds, and all other details are given in the audited annual financial reports of these companies. These annual reports are submitted to the government every year.

The name "Grameen" has its reputation from the success of innovative creation by Professor Yunus. He had been using the name "Grameen" long before the creation of the Grameen Bank. The branch of Krishi Bank that Professor Yunus was operating in the Jobra Village was named "Pilot Grameen Branch."

Later on the project that was administered under the Bangladesh Bank was named the "Grameen Bank Project." Grameen Bank was born from the Grameen Bank Project. Professor Yunus has been putting the name "Grameen" to all his initiatives, at home and abroad. This Bengali word is very familiar in different parts of the world, and is a respected word everywhere.

Q16: Who will inherit the 54 companies created by Professor Yunus? Who would be the owner of these companies in his absence?

Answer: None of these companies are personally owned by Professor Yunus. He does not hold or own a single share anywhere; as a result there is no need for concerned about his heir or successor. The majority of the 54 companies created by Professor Yunus are "not-for-profit" companies, registered under Section 28 of the Company's Act. These kinds of companies are not owned by anyone, hence there is no question of inheritors.

If a position falls vacant in the Governing Board or General Board then it is filled according to the governance structure of the company. Thus, the company continues to function without hindrance.

There are a few "for-profit" companies named Grameen which are in turn owned by other non-profit companies. Since the holding entities of these for-profit companies have attained sustainable and continued existence, there is no scope for creation of a vacuum in the ownership of these companies.

Since all of these companies have been formed under the appropriate laws, there are relevant legal regulatory authorities to oversee them. Even if there is a need to close these entities, the procedures have to go through the High Court.

Q17: Who is the owner of Grameen Phone?

Answer: One of the owners of Grameen Phone is a Norwegian Telecom company named Telenor. In turn, one of the majority owners of Telenor is the Norwegian government. The second owner of Grameen Phone is Grameen Telecom. This is a non-profit company registered under the appropriate section of the Company's Act (the details have been provided in a previous answer). The other owners of Grameen Phone are the numerous investors/shareholders of Bangladesh who continually trade its shares in the stock market. Professor Yunus has never owned a single share of Grameen Phone, directly or indirectly.

Q18: How did Grameen Telecom amass so much money for buying Grameen phone shares?

Answer: Grameen Telecom received the money to invest in the equity of Grameen Phone from three sources. Upon a request from Professor Yunus the famous wealthy American George Soros provided a loan of USD 11 million from his foundation to Grameen Telecom. This amount was invested in Grameen Phone. The loan was repaid to the foundation in due time. Loans were taken from various commercial banks to invest in Grameen Phone's equity, which have been paid off in due time. Grameen Telecom also took loan from Grameen Kalyan. Grameen Kalyan is a company formed under the Company's Act, also without any owner.

Q19: Where does the money that Grameen Telecom receives as a share of the profit from Grameen Phone go?

Answer:,/b> The money from the profit share received from Grameen Phone by Grameen Telecom was used to repay all the loans taken from commercial banks and other sources to invest in the equity of Grameen Phone.

The money from the profit is given out as education loans to impoverished boys and girls. In addition, major initiatives have been taken in the health sector with these funds.

In order to ensure that the profit from Grameen Telecom is properly utilised in the development of the country, a trust named "Grameen Telecom Trust" has been formed. Grameen Telecom donates its profits to the Trust.

The Trust has already initiated various projects geared towards public welfare. Land has been bought in Savar to set up a Health Complex. Preparations are underway to set up a medical college of international standard, a nursing college, a medical support college, a general hospital, a cardiac hospital and a cancer hospital within the Health Complex.

A plan has been taken up to set up a Health City in large scale that will be within the reach of the general people of the country, to avail quality healthcare services. In this regard, land acquisition is in progress in Dhaka's Maona area; plans have been made to set up a hospital and healthcare facilities of international standard, on a large scale here.

Investments are being made by Grameen Telecom Trust in equity of various Social Businesses set up to contribute to the solutions of various social challenges. A Social Business Industrial Park has been set up to accommodate Social Business concerns that are already functioning, and more are to come.

From the money that Grameen Telecom receives, financial assistance is provided to Grameen Kalyan for the welfare of Grameen Bank employees, and funds are provided for developing the primary healthcare sector of the country. So far, Grameen Telecom has given Grameen Kalyan Tk.8.80 crore.

There is no way that an individual can receive money from Grameen Telecom and/or Grameen Telecom Trust. The profit from Grameen Phone comes to Grameen Telecom, which has no owner, and then that money is handed over to Grameen Telecom Trust to ensure proper utilisation. Grameen Telecom Trust uses this money for the country, particularly for investing in different areas to enhance the welfare of the poor.

One may remember that a global stir was created when Grameen Phone took mobile services to the hands of poor women in the village, with the assistance of Grameen Telecom. Women in villages have been buying airtime at subsidized rates and selling them at market rates, making significant income for themselves. At one time, 4 lac phones were dedicated for this purpose and financially transformed the lives of many members. 80% of the service charge that Grameen Telecom received from Grameen Phone on this account was provided to Grameen Bank. Thus a total of Tk.287 crore has been given to Grameen Bank on this account since the beginning until 2012.

Q20: Why don't the borrowers of Grameen Bank get a share of the profits from Grameen Phone?

Answer: Initially Grameen Bank did not own any shares in Grameen Phone. A few years ago, when Grameen Phone released its shares on the stock market, the shares were bought on behalf of a trust formed for the welfare for the Grameen Bank borrowers' named "Grameen Bank Borrowers Investment Trust." The dividends from those shares have been regularly received by Grameen Bank Borrowers Investment Trust.

Source: The Daily Star