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The Crisis of Microfinance

NEW DELHI – The recent ouster of the Nobel Prize-winning Bangladeshi economist Mohammed Yunus as Managing Director of the Grameen Bank, which blazed a trail for microfinance in developing countries, has thrown a spotlight on the crisis engulfing a business that was once seen as a harbinger of hope for millions.

Yunus’s tussle with the government of Bangladesh, which had tried to retire him on grounds of age (he is 70) before firing him from his own board, is entangled in his country’s complicated politics. But Bangladeshi President Hasina Wajed’s remark that Yunus had “spent years sucking the blood of the poor” echoes similar charges being made in neighboring India against companies and banks that sought to emulate Grameen.