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David Roodman's Microfinance Open Book Blog

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On Tuesday, Norway's Ministry of Foreign Affairs released the results of a quick investigation of an old dispute between it and the Grameen Bank, which was revealed to the public a week earlier by Tom Heinemann's documentary for the Norwegian television program Brennpunkt.

Concludes the Minister:

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.

The report's account lines up well with my own, except that:

  • It rebuts a charge in the documentary that Norwegian aid was improperly used to invest in Grameen Phone (which, by the way, was a joint venture with the Norwegian phone giant Telenor).
  • It explains that the final "compromise" with the Grameen Bank was not that at all from Norway's point of view. Rather, Grameen Kalyan gave all of Norway's money back to Grameen Bank, as originally demanded. This agreement did not cover the money of other donors, which is why through the fog of Google-translated inside baseball it appeared to be a compromise. In the Grameen Bank's statement on the matter, it asserts that "100% of all donor's money" was in fact returned; I have seen neither independent verification nor financial statements to confirm that claim.

To reiterate, while the Grameen Bank undermined its credibility by violating the contract and then seeming to lie about the reasons, the dispute was only ever about the contract violation. It was not about whether funds were embezzled, nor about whether Grameen's plans would have failed to serve the poor.

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