Probe proposed into microlender allegations

Dhaka: Bangladesh's finance minister called for an investigation into allegations that Nobel Prize winning microlender Grameen bank had illegally diverted aid funds and said authorities had no intention of taking control of the bank.

A Norwegian television documentary last year said Grameen, led by Nobel Peace Prize winner Mohammad Younus, had for tax purposes shifted funds provided by Norway's aid agency in the 1990s from one legal entity to another.

The documentary has generated criticism in Bangladesh and abroad of Younus, whose bank has provided some $10 billion (Dh36.7 billion) in small loans to individuals, mainly women, to fund businesses and help them escape poverty.

Bangladeshi Prime Minister Shaikh Hasina accused Younus of resorting to a ‘trick' to avoid paying taxes.

Finance Minister Abdul Maal Abdul Muhith, speaking to Reuters late on Thursday, said: "Since there is a huge discussion both at home and abroad, it deserves an investigation through a government-appointed committee.

"We cannot say anything more about the probe at the moment, We will announce publicly when we will do it."

The government, he said, had "no intention of creating obstacles in the microfinance activities, nor do we have any plan to take over Grameen bank".The allegations come at a time when microlending faces political hostility in several developing countries including India where politicians have accused the bankers of profiteering from the poor.

The Norwegian government last year said an investigation into the allegations against Grameen ad found no evidence of misuse of the funds or corrupt practices.

Younus has said he would welcome an investigation into the allegations to "bring the truth to the citizens of Bangladesh as soon as possible".

Younus, dubbed ‘banker to the poor', was awarded the 2006 Nobel Peace for providing the programme of small loans which has led to the creation of similar programmes in other developing countries.