Microcredit can nourish poverty, not reduce it

Staff Reporter :
Criticizing Finance Minister AMA Muhith for his praising comments over microcredit scheme of Professor Muhammad Yunus in eradicating poverty, Prime Minister Sheikh Hasina has said the poverty was actually reduced due to “initiatives taken by the Awami League government.”
“The Finance Minister, a few days ago, highly praised microcredit saying that poverty eradication has been done due to microcredit scheme [of Yunus’ Grameen Bank]. If so, then why poverty rate was 60 per cent earlier, and now reduced to 22 per cent?” the PM said posing a question.
Sheikh Hasina, also the President of ruling AL, made the remarks while addressing the national council of Bangladesh Mahila Awami League at the auditorium of Krishibid Institution, Bangladesh at Farmgate in the city on Saturday.
“I like to tell the Finance Minister, if he takes a look over the statistics, he will see the real reason behind the poverty reduction….The poverty cannot be reduced by microcredit scheme, rather it nourishes the poverty. On the other hand, the persons who are involved in the microcredit business become richer. In fact, the poverty was reduced during the AL regime where the Finance Minister was involved,” the PM said.  
Coming down heavily on Finance Minister, she further said: “During the 1996-2001 tenure, then finance minister SAMS Kibria was also involved in that programme. The poverty reduction pace, however, lost speed during the rules of BNP and caretaker governments.”
“I am very much regretful to the Finance Minister…. He has highly praised such a person who was responsible for the World Bank’s withdrawal of Padma Bridge project fund. I had received threat from America, whereas the Finance Minister praised him [Yunus]!” the PM said.
Expressing her annoyance over microcredit scheme, Hasina said: “Rural women’s hard-earned money is used for repaying high interest rate of microcredit. The women cannot come out of the poverty and they live from hand to mouth. The microcredit traders don’t want poor people to come out of poverty cycle because it’ll stop their business.”
“My politics is to improve the fate of the country’s common people, not to do business with them,” clarifying her government’s policy to eradicating poverty the PM said.
Earlier on March 2, Finance Minister AMA Muhith praised Muhammad Yunus and BRAC founder Fazle Hasan Abed for their pioneering efforts to eradicate poverty from the country.
“Founder of Grameen Bank Dr Muhammad Yunus is an honorable person and he must be respected. BRAC founder Sir Fazle Hasan Abed is also a respected personality. We should respect them,” Muhith said while speaking at a function in the city.
Finance Minister said the initiatives of Yunus and Sir Abed started on a very small scale but they transformed those initiatives into institutions over the years. “I think these two projects, Grameen Bank and BRAC, exhibited the success in poverty eradicating.”
He continued: “Microcredit is playing an important role to remove poverty from Bangladesh. Grameen Bank first took the initiative to provide microcredit to the poor in the country. Many NGOs and organizations came forward in this sector after this. They are carrying on the activities of distributing loans among the poor. The rate of poverty has decreased a lot for the activity of microcredit.”
It is not the first time. Prime Minister Sheikh Hasina in the previous session of parliament termed Yunus a “cheat”, accusing him of not giving shares of Grameenphone profits to Grameen Bank in “breach of the promise he made before setting up of the telecom company”.
The PM in parliament also alleged that [not mentioning Yunus’ name], he had evaded tax on his fixed deposit income and also tax of some 40 to 50 companies that have links with Grameen Bank.
 “In 1996, when we came to power, he [Yunus] used to visit me and requested for licence to set up Grameenphone. He committed that profits of Grameenphone would go to Grameen Bank, which would use it for giving loans to general people,” Hasina said.
“As there was only one telecom operator at that time, I believed him and gave licence to set up Grameenphone to make telecom service available to the common people,” the PM informed the parliament.