Eugenio La Mesa's Blog on Social Business

Sign the petition "We Stand in Support of Prof. Yunus Against the Corruption Investigations by the Government of Bangladesh"

There is another petition in favour of Prof. Yunus, started by my friend Samantha Caccamo of Social Business Earth.

I ask to all my friends to sign it, the more we are, the better is going to be for Prof. Yunus, recently fired from the Grameen Bank (it is like if the Pope was fired from the Vatican..).

Thanks for your help. 

 

Letter to Friends and supporters from Friends Of Grameen (FOG)

Updated 9th March 2011

Letter to Friends and supporters from FOG

Creation of Friends of Grameen and International response to attacks against Grameen Bank and removal of Professor Yunus from the Grameen Bank

Dear Friends and Supporters of Professor Yunus and the Grameen Bank

You will have no doubt heard or read about the alarming events which have unfolded over the last days. This reached a climax yesterday when the High Court of Bangladesh upheld the Central Bank’s decision to remove Professor Yunus from his post as Managing Director of the Grameen Bank, which he founded over three decades ago. Professor Yunus’ lawyers have announced that they shall now appeal to the Supreme Court, as the High Court decision is blatantly politically oriented and without legal grounds. However, Professor Yunus will remain in post during the proceedings; a hearing is expected to be held on 15th March.

In order to provide ongoing support to Professor Yunus and the Grameen bank, at a time when the Government of Bangladesh is seeking to take over the Grameen Bank for political purposes, an organization named “Friends of Grameen” was launched earlier this month, comprising NGO’s, international figures, and companies, some of which have social business joint ventures with Grameen such as Danone, Veolia, and Credit Agricole.

We have launched a website: please come and visit and encourage others to do so as well!
We have received overwhelming encouragement and support, and many of you have contacted us asking what you can do to help. There is now a pressing need for global action! As a first step, we would like to suggest the following targeted actions:

Contacting key actors

- Bangladesh Embassies in your country :Reiterating the fact that the decision is unlawful, and that this is a dangerous turning point for the Grameen Bank
- Bangladeshi expat community: This is a key group to mobilize in your country, and raise awareness of the current situation.

Conveying your message

- In the local/ national / specialist press : via op-eds and opinion papers
- On blogs and websites

Social media

- Join our Facebook Page: Support Professor Yunus
- Encourage people to retweet #SupportYunus

Petitions

- A number of petitions have been circulating, but we would recommend the following:
o Open Letter to the President of the United States
o Petition to Sheikh Hasina, Prime Minister of Bangladesh

The current events have overwhelming public outrage in Bangladesh over the week-end, as a Government takeover of the Bank would effectively result in the 8.35 million borrower owners (and their families) of the Grameen Bank to be disowned. Sir Fazle Hasan Abed, founder of BRAC,the second largest microfinance organization in Bangladesh, has also voiced its backing of the Grameen Bank.

Hundreds of demonstrations took place in villages in support of Grameen Bank and Yunus, and NGOs, academics, and various figures have spoken out against the unlawful treatment of Professor Yunus. A "Citizen committee" was also formed as a testimony to Professor Yunus and his legacy to Bangladesh, and a “human chain” of NGOs, Grameen borrowers and supporters has been planned from the Southern border to the Northern tip of the country next Friday. In addition, a number of initiatives led by academics both in Bangladesh and abroad, and female activists have emerged over the last couple of days.

This news has of course received tremendous media attention over the last week, and it is very encouraging to see that most international media as well as some sections of the Bangladeshi media have sought to tell the story of the ongoing, brutal destabilization campaign which has been relentlessly pursued over the last months against Professor Yunus and the Grameen Bank. The Nobel Committee reiterated its support of the Grameen Bank and its founder, who were jointly awarded the prize in 2006, whilst other.

Within the international political sphere, alarm has been raised in the press by both Hilary Clinton and John Kerry, who have expressed their concern over the treatment of Professor Yunus. In Bangladesh, the alarm has been raised not only by the opposition parties but also by the Awami League party, and voices are now challenging the legitimacy, legality and the political cost of the attempt to sack the Peace Nobel Prize winner founder of Grameen Bank. We greatly appreciate your involvement and your help! Please keep us informed on your various actions, and of course, do not hesitate to contact us if you require any further information: contact@friendsofgrameen.com

Thanks again! Best Wishes

Friends of Grameen

The honorary committee is Chaired by Mary Robinson, former President of Ireland and former United Nations High Commissioner for Human Rights, and comprises members such as Jagdish Sharan Verma, former Chief Justice of India and former Chair of the National Human Rights Commission of India, and James D. Wolfensohn, former President of World Bank, Chairman and CEO Wolfensohn Fund Management, L.P, and Michel Camdessus, former Managing Director of the International Monetary Fund.

The executive Committee is chaired by Maria Nowak, President of ADIE, a pioneering French microfinance institution created in 1989. Kerry Kennedy human rights activist, President of the Robert F. Kennedy Foundation of Europe and Chair of the Amnesty International Leadership Council (USA) and President of the Robert F. Kennedy Center for Justice and Human Rights has joined as one of the Vice Presidents of its Executive Committee. The full list of members is included as an appendix.

SAP creates a Social Business Fund in Haiti with Prof. Yunus and Grameen Creative Lab

SAP, one of the biggest software companies in the world, is financing a Social Business Fund in Haiti with Prof. Yunus.

This is very important, because investing in a Social Business, rather than just giving money away for one-time donations to projects that must be refinanced every year, is a much wiser and effective way to invest the CSR budget that many companies have.

I've talked to SAP people at the Grameen Global Social Businss Summit, where I also met people from Adidas, ArcelorMittal, BASF,  Credit Agricole, Deutsche Telekom, GE Healthcare, Google, Danone, Humana, Johnson & Johnson,  Microsoft, Pepsi, Swarovski, UNIQLO and Volkswagen

This is another important step for a broader acceptance and adoption of the Social Business concept created by Prof. Yunus.
Congrats to SAP for their vision and execution, and I hope to see in the next months many more companies embracing social business, directly and/or indirectly.

An excerpt of the press release

Jim Hagemann Snabe, co-CEO of SAP AG. "We have brought that same focus to our relief efforts in Haiti over the past year and are moving beyond the 'one-time donation' concept by partnering with Professor Yunus on long-term economic development with the goal of creating enduring prosperity for the people of Haiti."

Sustainable Employment Through Social Businesses
SAP and its partners are providing support to new social businesses through the YY Haiti (Yunus & You) Social Business Fund and the newly created Grameen Creative Lab Haiti. The businesses will focus on solving specific social problems in sectors in areas such as vocational training, agriculture, nutrition, environmental stewardship and information technology (IT). The first social business pilots, including a cocoa processing factory in Camp-Perrin and an eco-hotel in Cap Haitien, will be launched soon, with additional social business ideas in the planning phase.

"The Grameen Creative Lab Haiti will promote economic empowerment for Haitians by fostering the creation of social businesses in Haiti," said Professor Muhammad Yunus, CEO of the Grameen Bank, founder of the Yunus Centre and originator of the microcredit and social business concept. "We are proud to partner with SAP, whose passion and expertise will contribute to the long-term success of job creation in Haiti."

The entire SAP press release

Report on Norwegian assistance to Grameen Bank: Ministry of Foreign Affairs says it is OK

Press release of the Norwegian Ministry of Foreing Affairs on the money given to Grameen Bank in 1998.

Norad submitted its report today on Norwegian support to Grameen Bank in Bangladesh in the 1980s and 1990s.

Minister of the Environment and International Development Erik Solheim requested Norad to prepare the report after the Norwegian television series “Brennpunkt” raised the question of where the Norwegian aid money had gone.

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.

“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 Mr Solheim. 

The report will be made available in English at mfa.no as soon as possible.

Grameen Bank's Response to Recent Press Reports

You can read the press statement and attachment sent out just now by Mr M Shahjahan, General Manager of Grameen Bank regarding the 47M grant from Norway:

We are sorry that many friends and well-wishers of Professor Yunus and Grameen Bank around the world were subject to mental agony because of the inaccurate and misleading news report published globally regarding an alleged "siphoning off" of a large amount money by Professor Yunus through one of his organizations, or "Stashing of $100 million by Nobel Laureate Professor Yunus", as one news organization put it. The media reports were triggered by the documentary "Fanget I Mikrogjeld" shown on Norwegian TV on Tuesday 30 November and by report that appeared in bdnews24.com on 1 December.

We wish to assure all readers that these reports are a total fabrication and baseless. Our whole background story was given in Professor Yunus's letter of January 8, 1998.This letter has been circulated by the news agency along with their report. Any reader will immediately know how baseless the report is. We are including this letter along with this rejoinder.

There was no wrong doing in the agreement between Grameen Bank and Grameen Kalyan. Decisions were taken by Grameen Bank Board, with due deliberation, good faith, and with good intentions to benefit the poor. The actions taken by the Board were viewed as the best use of the funds at the time, a way to ensure Grameen Bank would remain financially accountable for the money while still ensuring that the borrowers received the most possible benefit from donors' grants.

For the grant that Grameen Bank received from Norad and other donor agencies under its 3rd extension phase, Grameen Bank and donors agreed that a 2% interest rate would be fixed on the grant and that interest would be used to create a Social Advancement Fund (SAF) for the welfare of Grameen Bank borrowers and employees. The creation of SAF was our suggestion, donors happily agreed to it.

Grameen Bank believed that if the SAF was kept within Grameen Bank and managed by Grameen Bank then it would not receive the attention it deserves. The core activity of Grameen Bank, the lending program, would always get precedence. Grameen Bank may not pay sufficient attention to create welfare-based programs for its members and employees.

Moreover, Grameen's tax exemption period expired on 31st December, 1996. At that time it was uncertain whether the government would extend the tax exemption period after 31stDecember, 1996. If the government would not extend the period then the contribution to the Social Advancement Fund as expenses would not be considered as an expenditure of Grameen Bank. As a result, 40% tax would have been imposed on contribution to Social Advancement Fund. It might compel Grameen Bank to reduce or stop charging 2% interest on revolving fund to contribute to SAF which would be a violation of the agreement with donors. Professor Yunus explains this in his letter dated January 8, 1998 which we attach with this statement. Under these circumstances, the need for a new organization emerged. This led to the creation of Grameen Kalyan as the dedicated organization to utilize the interest income.

Grameen Kalyan was created by the Grameen Bank board (Board Decision 42.8, dated April 25, 1996) in 1996 for the benefit of the Grameen borrowers and employees (90 percent of whom come from low income families), after taking into consideration the opinion of the renowned chartered accountant firm of Bangladesh named Rahman Rahman Huq and Co of Bangladesh, affiliated partner of KPMG.

Grameen Kalyan is a not- for-profit company under company law. No individual owns any share of this company. The profit of this company is not divisible and can only be recycled into its operation to maximize its stated objectives of providing primarily healthcare and education services of Grameen Bank's members and employees.

Empowered by a board decision and executing an agreement between Grameen Bank and Grameen Kalyan under which, an endowment to the extent of Taka 3917 million 014 thousand was created by simultaneous notional "transfer" of money. Grameen Kalyan was never given the control and possession of the fund. This simultaneous transfer and Grameen Bank receiving it back in the form of a loan, created an opportunity to charge interest on this loan. That interest income was ear-marked to finance borrowers Social Advancement Fund (SAF) as agreed by the donors earlier within the Bank. It was a financial innovation to benefit the poor. Grameen Kalyan received 2% per cent interest on the money. This money was to be used to provide education and other services to the borrowers and employees of Grameen Bank.

The programs run by Grameen Kalyan with the interest accumulated in the SAF included:

1.0 Provide support for higher studies for the academically accomplished children's of borrowers

2.0 Scholarship programs for the academically accomplished children's of borrowers

3.0 Provide healthcare services to the borrowers at low cost through healthcare centres in the villages. Currently it operates 51 health centres throughout the country.

4.0 Medical expense loans and assistance programs for the employees and their family member

5.0 Provide assistance for the employees' household loan program

The actions taken by the Board, which is comprised of 9 elected representatives of Grameen Bank borrowers, and three senior representative of the government, were viewed as the best use of the funds, a way to ensure Grameen Bank would remain financially accountable for the money while still ensuring that the borrowers received the most possible benefit from donors' grants. Afterwards not only Norad's money, but the 100% of all donor's money to the extent of Taka 3,474 million 501 thousand was "transferred back", from Grameen Kalyan to Grameen Bank, although money was always in the Grameen Bank's account. Only SAF fund money amounting to Taka 442 million 512 thousand remained with Grameen Kalyan as it was created out of the interest.

Some print and electronic media stated that Grameen Bank transferred 7 billion Taka to Grameen Kalyan which is absolutely false. Grameen Bank transferred to Gameen Kalyan Taka 3917 million 014 thousand as mentioned before and transferred back Taka 3474 million 502 thousand which is stated earlier. These can be verified through Grameen Bank's annually audited accounts.

If we convert the aforesaid amount at the prevailing exchange rate of 1996, then the ‘transfer' stands at about US $ 96 million and the ‘transfer back' stands at approximately US $ 85 million. Thus all the donors money was transferred back and only US $ 11 million remained with Grameen Kalyan as it was created out of interest. So the report where it mentions that Grameen Bank transferred US $ 100 million and transferred back only US $ 30 million is completely false.

All necessary entries had been taken in the books of accounts of Grameen Bank to replace the transfer, though no physical fund transfer took place, as the fund was with Grameen Bank all along. The fund in question never went out of the Grameen Bank's account and the question of Professor Yunus siphoning this amount is false and baseless. All these talk about siphoning off are just empty words for sensationalism.

According to the management and board of Grameen Bank there was no violation of any provision of the agreement with Norad. It was a matter of differing views on the subject. Norad considered it a departure from the provision of the agreement, while Grameen Bank thought it was done within the agreement. Grameen Bank did not want go into battle on this issue and so jeopardize our excellent relationship. Grameen Bank reversed its decision and restored the status quo.

The concerns brought up by Norad and the Norwegian government were treated with the utmost seriousness by Grameen Bank and Professor Yunus, and both sides worked to resolve the differing interpretation of a clause in their initial Agreement and arrive at a solution in a satisfactory manner. By restoring the status quo the matter was amicably resolved. It never came back since then. None of the parties involved felt aggrieved.

This is an excerpt from the Norwegian Embassy's letter dated 26 May 1998: H.E. Ambassador Hans Fredrik Lehne and Einar Landmark write "The Embassy highly appreciates your cooperation in solving this issue, and is pleased to have arrived at a solution which is satisfactory for Grameen Bank as well as the embassy".
Reports gave the impression that these transactions were somehow secretive. There was nothing secretive about. It was a matter of honest disagreement.

Grameen Bank's decision making has always remained very transparent. Grameen Bank's board is always chaired by a distinguished citizen of the country appointed by the government. Government appoints two high officials as members of the board besides the Chairman. Grameen Bank was created by an ordinance. It requires Bank to be audited by two chartered accountant firms every year and submit the accounts to the government as well to the tax department. Grameen Bank also sent these reports every year to all donors. In addition it is inspected by the central bank annually. Besides all audited reports of Grameen Bank, from 1983 to 2009 displayed in Grameen Bank's website in addition to all current statistics relating to the operation of the Bank. Moreover Grameen Bank regularly publishes "Grameen Bank at a Glance" monthly and post it in its website which introduces Grameen Kalyan in the following way.

"Grameen Kalyan"

Grameen Kalyan (well-being) is a spin off company created by Grameen Bank. Grameen Bank created an internal fund called Social Advancement Fund (SAF) by imputing interest on all the grant money it received from various donors. SAF has been converted into a separate company to carry out its mandate to undertake social advance activities among the Grameen borrowers, such as, education, health, technology, etc".

Grameen Bank is Nobel Prize winning bank. We take pride in our transparency and our service to the poor.

The attached letter from Professor Muhammad Yunus to the then Amabassador of the Royal Norwegian Embassy can be found here.

 

 

Letter of Prof. Yunus clarifing the story of the 47M from Norway

I've just received from the Yunus Center a letter that Prof. Yunus sent to the Norwegian Ambassador in Dhaka dated 8th January, 1998.

This clarifies the position of Grameen Bank regarding the issues of the 47,000,000 given by Norway, and all the media are talking about it.

I'll coment later.

Thanks to Lamiya Morshed and my friends at the Yunus Center.

Prof. Yunus, I'm with you!

My speech on "health-care and Social Business" for Thalassemia at Grameen Global Social Business Summit

As I previously wrote, I have attended the Global Social Business Summit 2010 organized by Grameen Creative Lab and Prof. Yunus. It is an invitation only event with people from all over the world (companies, foundations, NGO, universities).

Workshop on "Health care and social business"
Like I already did at the Klassentreffen of Grameen Creative Lab, I've co-moderated the "health care and social business" workshop, this time  with Imamus Sultan, CEO of Grameen Health Care. We have received many questions about the Social Business model to cure Thalassemia. I summarize some of them, with the answers we gave:

1) Since a Bone Marrow Transplantation (BMT) to cure thalassemia costs about 20/25,000 USD in Asia, wouldn't be better so spend the same money to cure many more patients for a desease which is less expensive?
Your question would be right if we would spend taxpayers money; we are a social business in the market, and our "customers" are the families who have a Thalassemia child and who can afford the cost of the BMT. So will will only use private money, and the gross profit will be used to cross-subside the BMT for patients who can't afford it.

2) Why people should come to Asia to have (BMT)
-Many Asian children suffers from Thalassemia, and some of them go to western countries, while it is better for the children (and less exoensive) to stay in thei country or in a similar one.

-Furthermore, there is medical tourism for hearth-surgery from all over the world to Asia, and it could also happen for BMT.

-Thanks to Prof. Guido Lucarelli, Italian doctors are famous in the world to cure Thalassemia, and the scientific coordination will be done by italian doctors.

- Another good reason is that a patient spends about 10% of what we would spend in western countries.

3) Do you plan to have patients from western countries?
Non at the beginning, but it could a goal for the next years. In the USA there are some insurance companies charging less if the patient accepts to have hearth surgery in Asia, in certified hospitals. We could do the same for BMT.

4) Will you also be involved in awarness and screening?
Not directly. But we know that once you inform a family that Thalassemia can be cured through BMT (so no more blood transfusions), then it is easier to convince all the relatives to screen themselves to see if they are carriers.

5) Will you create a blood bank?
It is not in our plans.

6) How do you decide how much to charge? Do you negotiate 1-to-1 with every patient?
We will not negotiate 1-to-1. The price will be the same for all the paying patients.

7) How will you attract CSR money?
Corporate Social Responsibility (CSR) is an important goal for us, in 2 ways:

- to look for the initial capital that we need to finance the start up of the BMT unit; like Prof. Yunus always says, CSR money is often (if not always) given for one-time projects (and sometimes just to have a good media coverage...), which need te be financed again the following years with other CSR money; on the contrary, in the social business you just need the initial capital, and in the following years it becomes financially self-sustainable.

- a company could use a slice of its CSR budget to sponsor a patient, paying his cure (for example the children of an employee).

International networking
In the other sessions that I have attended (financing social business, how companies could start a social business) I did an excellent high-level networking with people from all over the world. Here some of the names of the organization I'm in touch with:

Companies
Adidas , ArcelorMittal, BASF,  Credit Agricole, Deutsche Telekom, GE Healthcare, Google, Danone, Humana, Johnson & Johnson,  Microsoft, Pepsi, SAP, Swarovski, UNIQLO,  Volkswagen

Strategic Consultancy
Accenture, Bain, Boston Consulting Group, McKinsey, Roland Berger

Grameen family
Basf-Grameen, Grameen America, Grameen Creative Lab, Grameen Credit Agricole, Grameen Foundation, Grameen Health care, Grameen Research, Grameen Krishi (agriculture) Foundation, Grameen Motsho O Pashusampad Foundation, Grameen Telecom, Grameen Knitwear, Grameen Distribution, Grameen Fabrics & Fashions, Grameen Shakti, Grameen Trust, Grameen Uniqlo, Grameen Veolia, Yunus Center, Yunus center at Asian Institue of Technology

Academic World
Bocconi University, California State University Channel Island, European Business School (EBS), Glasgow Caledonian University, HEC Paris, IESE Barcelona, Istituto Europe di Design, Kwansei Gakuin University, Kyushu University, McGill University, Rikkyo University, Stanford, Yukiguni Maitake

Indian companies and foundations
iWatch, Reliance, Wockhardt Foundation, WhyPoll

Press
Wired, Vogue, Der Spiegel

To catch a Dollar
I've watched the premiere of the movie "To Catch a Dollar" by Gayle Ferraro, about the story of Grameen America, microcredit exported from Bangladesh to the whealtiest county of world! It will be in the theatres from March 10th 2011 (my birthday, by the way"), with a big launch at Google HQ with Prof. Yunus and Google CEO.

My thoughts
I also listened to Paulo Coelho' speech. When asked "What it the secret of your success?", he said "Honestly, I have no idea, and if I knew if wouldn't be the same. I just write what I like, and I wonder why millions of people all over the world read my books".
He also said that being happy doesn't mean to be rich, but to help other people, and I totally agree with him

It was also very interesting the speech of the indian film director Shekhar Kapur, Academy Award winner for the movie "Elizabeth"; I talked to him about my new india project "Cure Thalassemia".

I spoke to dozens of people of the Grameen companies, and also with Prof. Yunus at the gala dinner.
I've noticed that many big companies are seriously evaluating to start and/or be involved in social business, and I think it is very positive for the future of the Social Business idea.

I'll definitely come back next year, and thanks again to Prof. Yunus and his staff in Bangladesh and in Germany for the invitation and for having asked me to co-lead the health-care workshop.

My first visit to Grameen Italy Foundation

On October 30th I've been to Bologna to visit Grameen Italy Foundation, creata da Grameen Trust, Bologna University e Unicredit Foundation.

I had been invited by my friend Luisa Brunori, the Vice President, and I've also met Shamimur Rahman,  Riccardo Lenzi and Massimo Antinucci.

They have told me their plans for the future, and I've seen how I could help them for the Internet Social Media strategy for the Grameen Italy Foundation, Grameen Italy and M.I.O (the international obsevatory on microfinance). I had a great time and I met very nice people.

On this topic I have already helped the  Yunus Center in Bangladesh and the Grameen Creative Lab in Germany, and I hope I'll be able to do the same for them.

Prof. Yunus links my blog from his Facebook page!

Prof. Yunus has linked my blog on Social Business form his Facebook page! Here what he says about me:

Eugenio La Mesa, a serial and social business entrepreneur, has a great blog about Social Business; in addition he has also set up a great Social Business called Cure2Children which works to help children with thalassemia. You can read more by visiting Eugenio's blog on Social Business.

I'm very happy and I'll keep doing my best to regularly update this blog with the behind the scenes of what I'm doing in Bangladesh with Prof. Yunus, in India with Cure Thalassemia, and my involvement as speaker at the Grameen events wordlwide.

Thanks to Prof. Yunus, and my friends at the Yunus Centre: Lamiya Morshed, Nadina Perera and Shariful Islam. YY

My plans for the Grameen Global Social Business Summit

As I already wrote, I'll attend the next Grameen Global Social Business Summit in Germany on 4-5 November, an invitation only event organized by Prof. Yunus with people from all over world interested in Social Business; this is the second edition, and also last year I have been invited.

The agenda is very busy, and, among other things, I'll:

- co-lead the "health care social business" morning  workshop with Imamus Sultan, CEO of Grameen Health Care and Sheda Gould of Grameen Creative Lab
- partecipate in a focus group with all the representatives of the worldwide Grameen Social Business Companies and joint ventures
- attend the worskhop "Financing social business"
- listen to the public speech of Prof. Yunus with author and social business ambassador Paulo Coelho
- watch the Film Premiere: “To catch a dollar: Muhammad Yunus Banks on America“

And excellent networking is expected, like last year!

I'll write more once I'll be back.