Norway gives clean chit to Grameen Bank
A screenshot of the documentary titled "Caught in Micro debt" shows a document stating a compromise about fund transfer being successfully made. Image: Grab from NRK documentaryNorwegian Minister for Environment and International Development Erik Solheim on Wednesday clarified that Grameen Bank had not embezzled the donor’s funds or used the money for unintended purposes.
He also said Grameen Bank was not involved in corrupt practices, according to a press release posted on the Norwegian Foreign Affairs Ministry website.
As Solheim requested Norad to prepare a report on the fund transfer by Grameen Bank to another of its spin-off organisation following a TV series broadcast by a Norwegian channel, the minister said the matter was concluded when the agreement concerning reimbursement of the funds was entered into in May 1998.
“According to the report, there is no indication that Norwegian funds have been used for unintended purposes, or that Grameen Bank has engaged in corrupt practices or embezzled funds. The matter was concluded when the agreement concerning reimbursement of the funds was entered into in May 1998 under the government in office at the time,” said Erik Solheim.
Norad’s report shows that Grameen Bank transferred a total of NOK 608.5 million to its sister company Grameen Kalyan in 1996. Norway’s share of this amount is estimated to be approximately NOK 170 million. The Norwegian Embassy in Dhaka reacted immediately when it discovered the transfer in 1997. In the embassy’s view, the transfer was not in accordance with the agreement. The matter was raised with Grameen Bank. Following negotiations, it was agreed in May 1998 that NOK 170 million was to be transferred back from Grameen Kalyan to Grameen Bank.
On December 3, Grameen Bank denied any wrongdoing, saying it had transferred 96 million dollars of aid to Grameen Kalyan and had it back as loan the same day to enlarge funds for micro-borrowers.
Dr Muhammad Yunus, founder of the bank, has defended himself saying this had been done to ensure maximum transparency and responsible use of the Bank's revolving fund.
The documentary, titled "Fanget i Mikrogjeld" or "Caught in Micro debt", was aired on Tuesday on the National Norwegian Television, NRK. The whole episode took place about one and a half decades ago. And then it was presumably ironed out, as the documentary showed a compromise had been reached concerning transfer of the funds Norway granted to Grameen Bank. Under the agreed compromise, 170 million Norwegian kroners was transferred back to GB.
The documentary claimed the Norwegian embassy in Dhaka at a meeting with the bank at its office on December 3, 1997 came to know about the May 7, 1997 agreement between Grameen Bank and Grameen Kalyan, which became effective on December 31, 1996 for transfer of funds of Tk 3.914 billion.
In a letter to Yunus on December 15, 1997, the embassy said: "In line with the agreement, Grameen Bank transferred all funds accumulated up to December 31, 1996 received from donors for revolving funds, to Grameen Kalyan, which at the same date transferred the amount to Grameen Bank as a loan.
Tk 1.927 billion of the amount was related to the revolving fund for housing loans.
Grameen Kalyan is in fact a spin-off created in 1996 by Grameen Bank, which set up an internal fund called Social Advancement Fund (SAF) by imputing interest on all the grant money it received from various donors.
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