I met Dr. Muhammad Yunus today in Berlin. He was here in the SPD office Willy-Brandt House at Wilhelmstrasse for a reception of the local Bangladeshis (Photo: Yunus with an organizer).
This is his second visit to Germany in this month. He is here to attend the preparatory meetings of the G8 summit to be held next month. Chancellor Angela Merkel, leading the German presidency of this summit is trying to do something for the women of Africa. She has invited Dr. Yunus to share his experience of working with the economic development of women.
Dr. Yunus delivered his speech in his trademark fashion. He spoke about his work, Grameen bank and nobel prize. I have read or heard a lot on these issues. The new thing I had learnt that the beggar loan scheme was an experiment to prove that every human being is an entrepreneur at heart, many of them do not get the chance to explore it.
I was waiting for the question and answer session. The current issues with him came up. He avoided the answer why he had retracted himself from politics. He said that he had discussed about it to the press, he has nothing more to add. Answering a question he said that he initially supported the 22nd January Election because he thought not having election in time would create more chaos in the country.
He refuted the claims about high interest rates of Grameen Bank by saying that the figures of 30% or 50% are only rumors. There are four types of loan programs in Grameen Bank. Capital for making these loans are collected from the deposits of these loan takers. These people also have separate accounts where they deposit their savings. They earn interest @ 8-12% depending on schemes. On an average the cost of capital for Grameen Bank is 10%. The loan programs are as follows:
1) Housing loan - 7% interest per annum (less than cost of capital)
2) Education loan - no interest while a student - after that 5% interest (less than the cost of capital)
3) Loan for beggars - no interest
4) Other loan schemes - maximum 20% interest pa.
Dr. Yunus said that the 10% interest in addition to the cost of capital is mainly to cover the loss in other loan programs. He said that in contrary to public belief he is not the owner of Grameen Bank. Rather the loan taker women own and run the band through a board where he is an adviser. When he proposed that whether he should cut the high interest rate (Govt. sector average 15%, private sector average 18%) and lower the interest on their deposits as well they refused. They said that they will be able to bear this much interest rate.
Around 100 Bangladeshis were among the crowd. It was again proved that he can enthrall the audience with his charismatic speech.