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Mohammed Yunis is possibly the most famous person in Bangladesh, a South Asian country with a population of more than one hundred and seventy million. He's considered the father of microfinance, that means handing out tiny loans to low income or impoverished people looking to start businesses. The work earned him a Nobel Peace Prize in two thousand and six and a US Presidential Medal of Freedom.
Offering himself as a guarantor, he withdrew a loan, paid off their debts, and founded Grameen Bank, a bank that has dispersed over eight billion dollars, lifting millions of people from poverty with micro loans. Mohammed Yunis was just trying to help a village, but he somehow managed to change the world.
But now the eighty four ye year old economist is facing a possible life sentence in prison. This January, Unus was sentenced to six months in jail for violating labor laws, and he faces nearly two hundred charges, including accusations of money laundering and embezzlement. He denies all of them. It's a battle with Bangladesh's government that's been raging long before January.
Prime Minister Sheik Hasina, the country's most powerful politician, has publicly criticized Yunus for years, and questions about the source of that animosity have swirled, whether it's Unus's influence abroad, political ambitions he's expressed in the past, or genuine critical eye on his businesses.
The tone has only intensified over the years in terms of her seeing him not just as a threat of some kind, but also as someone who really just gets under her skin, someone who's created this public profile and has the backing of so much of the West.
Really Bloomberg reporter Kai Schultz has been covering Unis's story and met with him while he was on bail at his home in Dhaka.
He's facing serious allegations, but at the same time, he seemed fairly optimistic.
Our position always we never committed these times, but he's there, so we have to go and fight those cases. Prime Minister looks at it in a different way, so basically it became a smear campaign against me.
The government argues that the allegations have merit and that Unit's businesses aren't nearly as clean, as he claims, but as Western supporters say, the cases against Units are politically motivated. It's become a diplomatic crisis. Many Western governments are close to Units. They see him as a stable voice for Maan Ladesh, and they fear that Shei Casina has pushed the country in the direction of authoritarianism.
Welcome to the Big tach Asia from Bloomberg News. I'm Wanha. Every week we take you inside some of the world's biggest and most powerful economies and the markets, tycoons and businesses that drive this ever shifting region. Today on the show, how one of the most celebrated economists in the world went from winning the Nobel Prize to facing life imprisonment, and what his complicated saga could mean for Bangladesh's future.
Mohammad Yunis grew up in Chittagong, the second largest city in Bangladesh.
He's from a pretty large family and his father was a jeweler. Growing up, it was fairly idyllic. He moved to the US in the nineteen sixties on a Fulbright scholarship and he remained there for a number of years, completing graduate studies and also teaching economics in Tennessee.
Bloomberg Sky Schultz told me how the poverty UNIS in Bangladesh would influence his life's work.
At that point in time, Bangladesh was one of the most impoverished pockets of the world. Throughout the nineteen seventies, he would go out into villages and he would talk to people about the challenges that they faced overcoming poverty. And what he found is that many people had great ideas to build businesses, but they lacked the capital. He also found that a potential solution, the idea of giving
a business loan to an entrepreneur, simply didn't exist. And when he brought that idea to local banks, they literally laughed in his face.
This idea UNIS was developing microfinance.
Microfinance is giving a loan to someone who lacks collateral, someone who can't approach a traditional bank, and someone who has a great idea that they want to implement. So it's a business loan and it's used to scale some sort of idea that an entrepreneur has.
It was a revolutionary concept, one that went up against the conventional belief that people living in poverty were less likely to settle debts and In nineteen eighty three, Unis established his own institution, Ramin Bank. It was his counter to that belief and a way to put his economic theories into practice. Unis primarily made Grameen's microfinance loans available to women in remote areas of Bangladesh, and he found that they used that money more productively than men.
Bangladesh is a majority Muslim country and they were typically very hierarchical. So in many cases he would have to bring a female associate because the women in the village simply would not talk to him. They would fear a censor from their husbands or from leaders in these communities. And once women did receive the money, because they were so used to managing households, they understood that this was another thing that had to be carefully managed in their lives.
That they were less likely to spend it on things like alcohol, and that in many cases, the women were driving the economies of their families.
By nineteen ninety eight, Gramin Bank was lending more than two billion dollars to millions of families. Unice's unconventional views on banking earned him a nickname Banker to the poor. He's met and hosted global leaders, dignitaries and business titans
like Ted Turner, Banky Moon, and the Clintons. Globally, grimen Bank has inspired similar projects in more than one hundred countries, and Eunice has evangelized his views to the world for decades, like in a speech he gave at Harvard Innovation Labs in twenty twelve, I just.
Look at the conventional banks how they do it. Once I learned how to do it, I just do the opposite. They go to the rich. I go to the poor. They go to men. I go to women. They go to the city center to do the business. I go to the remote village.
Micro credit in Unis's work is widely seen as one reason why Bangladesh has managed to elevate itself to a lower middle income economy today.
But as Eunice's star rose, so did scrutiny of his work. In twenty ten, a Norwegian documentary accused Unus of improperly moving nearly one hundred million in donations to an affiliated business.
He was eventually cleared of wrongdoing, but one key person latched onto the controversy and continued to question the effectiveness of grimen Bank's loans Bangladeshi Prime Minister Shaik Hasina, in one of her sharpest rebukes of Eunice, Hassina, who was once his supporter, accused him of sucking blood from the poor. In twenty eleven, under pressure from the government, Unis resigned
from his job as managing director of Grimen Bank. The government argued that he had exceeded the mandatory retirement age.
This is the institution that he founded, it's the institution that made him famous, and now the government was arguing that he had exceeded a mandatory retirement limit. At that point, there really was a shift in tone and the government wasn't interested in entertaining the idea that Unis should or could stay on at Gramine Bank.
Units challenged the order in court, but was rejected, and in twenty twelve, the government amended a law that effectively brought Gramin under state control. Unis went on to focus on a number of nonprofits under the Grimen Bank umbrella, like Gramine Telecom. It's a nonprofit that works to bolster mobile service in rural areas, the center of his current legal battle. But Eunice's legal war with Prime Minister Hasina seems to have just begun as he faces numerous charges.
Eunice is in limbo on bail at home and waiting for the outcome of his pending trials. Kai wanted to understand whether any of these charges had merit and if there was a more complicated story there, so he visited Daka to hear from Unis himself.
Everybody tries to find out what is the reason. Why is she against me? Did I do something to her to hurt her? Something hurt her interest? As I said, A billion dollar question.
After the break. Kai on his interview with Eunis and what the economist's long standing feud with the Prime minister could mean for the future of Bangladesh. Mohammed Yunis, the Nobil Prize winning economist, rose to fame pioneering micro loans as a tool to fight poverty. He's currently facing trial in a money laundering case that could see him imprisoned for life. Bloomberg's Kai Schultz interviewed Unice at his home in the capital of Dacca.
Hello His home was fairly modest considering his public profile. It's an apartment in a diplomatic quarter of Daca. It's on an upper floor of a high rise it's decorated with all kinds of travel momentos, pottery, portraits, pictures with his friends. He has a painting of him with his Nobel Prize.
Uni says that he, his wife, and his younger daughter spend most of their time at home now. He was released on bail in January to appeal a sentence of six months in jail for labor law violations. When he's not at home, he's in and out of court.
Look i'm here, I'm accused of money laundering. I'm accused of forgery, I'm accused of stealing money and all those kinds of things. Our position always we never committed these crimes, but it's there, so we have to go and fight those cases to establish our case that we never committed those grimes. Prime Minister looks at it in a different way that then I'm the blood secker of the poor people. So basically it became a smear campaign against me. Everybody
tries to find out what is the reason. Why is she against me? So explanation is one is jealousy. She is not famous and I'm famous. That's kind doctor. Another one's political. She finds out a threat. I said, look, I'm not a politicians. This is the last thing I.
Will ever do.
Bloomberg reached out to Prime Minister Shaike Hasina's office for comment, but she declined an interview. Bangladesh's State Minister for Information told Bloomberg that the charge against Unice aren't political end quote. The law is taking its due course, and Kai says Unice's case and the outcome of this legal battle have real implications for Bangladesh and its emerging economy.
Many Western governments are close to Unite. They see him as a stable voice for Bangladesh, and they fear that Shai Casina has pushed the country in the direction of authoritarianism. And so there's this perception that if Bangladesh can go after its most famous citizen, frankly, that it could really go after anyone, including people who are investing in Bangladesh
and setting up businesses. So there's a fear that there could be a chilling effect and that foreign direct investment, which has already taken a hit in Bangladesh over the past few years for various reasons, could fall even further, and that Bangladesh, which is one of the fastest growing economies in the world, may no longer look as promising as it once did.
For now, the entire Unice household is on edge, awaiting his fate in court. At home, the family keeps a bag packed just in case the house gets raided by authorities, and Unis says they're prepared for any outcome.
Everything is affected in my personal life because this is not an easy thing. It's you have to go and spend your time in the jail, leaving your family back. And my wife is a demonstia patient. She depends totally on me. She has no sense of the world around her, So when I go to jail, what happens to her.
Unice's life is very different from what he was used to. He was constantly traveling. Now he's often in Bangladesh.
Friends in those countries invited me to be there. They're insisting that I should leave the country. And my argument is, look, I live here, this is where I began, this is all my colleagues who work with me. I can leave, but what happens to my colleagues, what happens to the work Detritia And I said, no, I'm not going to destroy everything that I built and we'll continue. And I don't see why I cannot do that.
This is The Big Take Asia from Bloomberg News. I'm one ha. This episode was produced by Young Young, Naomi and Jessica Beck. It was mixed by Alex Suguiera and fact checked by Naomi. It was edited by Aaron Edwards, Caitlin Kenny, and David Rocks. Additional reporting by Arune Devneth. Special thanks to Bloomberg's Originals team. Our senior producers are Naomi Shaven and Kim Gettelson, and our senior editor is Elizabeth Ponso. Nicole Beemster Bower is our executive producer, and
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