Being Crossfire

A few weeks after Norwegian television premiered Tom Heinemann's documentary, which aims squarely at Muhammad Yunus and the Grameen Bank, the Grameen Foundation asked to interview me for a video response. The Foundation is a Washington-based charity that was started in the late 1990s to propagate the Grameen Bank's credit model to other nations. I agreed, on the condition that they the Foundation allowed me, as Tom had, to sign off on whatever footage of me was used. The interview was straightforward. As best I can recall, we talked about two main things. One was whether the documentary is fair. I said I did not think it is, although it was possible that it would make the global conversation as a whole fairer by offering a counterpoint to the happy stories that microfinance promoters tell. The other thing was whether the Grameen Bank charges 30%/year. That's the part the Grameen Foundation posted on YouTube: It's also what Alex Counts, the Foundation's CEO, focussed on:I have to say, after pondering the 100--200% cost of Compartamos's microcredit---and the 100%+ cost of the Grameen Foundation's Nigerian partner LAPO---the differences at stake here don't seem so significant. I first estimated Grameen's annual interest rate at about 24%, then 17--20%. MFTransparency, tracking more closely to the Bank's official policies, estimated almost exactly 20%. (My figures are more accurate if loan officers routinely deviate from policy by forcing savings, giving my first, higher estimate; or by not going through the labor of figuring interest charges exactly on each week's outstanding balance, giving my second, lower estimate. But given the care and depth of MFTransparency's new work I think the presumption should be that it is right, until we have field evidence to the contrary.)At any rate, Tom cited a figure of 30.5% from a report by Q.K. Ahmad, chairman of PKSF, the Bangladesh government's wholesale lender to microcreditors. (Mr. Ahmad would like you to know that he was a member of the IPCC, which won a Nobel Peace Price.) This figure is higher, as I explained in my video, because it includes client transaction costs---interesting, but needing clear explanation.So arguably, in hammering it so, the Grameen Foundation is exaggerating the importance of this misrepresentation in the documentary. On the other hand, it does raise legitimate questions about the manner in which facts were gathered for the film. And is there not some poetic justice too? This attack seems not unlike Tom's exposure of the old dispute between Norway and the Grameen Bank. Nothing revealed so far about that dispute suggests grave, unremedied impropriety, nor harm to the poor. Yet it does raise legitimate questions about the manner in which the Grameen Bank was run.It's a odd position to be in, providing ammunition for both sides. But also familiar. I can't help thinking of how I grew up with divorced parents. My survival strategy was, as it were, to maintain good relations with both sides, favoring neither. So too now, my approach has been to talk to all comers and do my best to be honest and accurate. I've only said no to an interview once: that was to Fox "News" after the Kiva post.The third Grameen Foundation video works to rebut an attack on the origin myth of microcredit. I gather that Tom's documentary says (in Bangla and Norwegian) that Yunus's first borrower, the famous stool-maker Sufiya Begum, died a beggar (I think around 04:30). No, says documentary maker Gayle Ferraro, she's alive and well:Honestly, I find this all confusing. Since Grameen's interest rate affects millions of borrowers while this muddle relates to just one, I will give the latter roughly proportional attention and let you figure it out.