In Bangladesh, Ms. Hasina appears to have become embittered with Grameen after its founder, Muhammad Yunus, who shared the Nobel, announced in 2007 that he would start a political party.  At that time, the country was ruled by a caretaker government appointed by the military.  Though Mr. Yunus later gave up on the idea, analysts say Ms. Hasina and Mr. Yunus have not made amends. 

Ms. Hasina’s recent comments about microcredit were prompted by a Norwegian documentary that accused Grameen of improperly transferring to an affiliate $100 million that Norway had donated to it more than a decade ago.  Ms. Hasina said Grameen, 3.4 percent of which is owned by the government, might have transferred the money to avoid taxes. 

The bank, which has denied that accusation, reversed the transfer after Norwegian officials objected to it.  Norway recently issued a statement clearing Grameen of wrongdoing. 

The prime minister’s press secretary did not return calls seeking comment. 

In India, leaders in the southern state of Andhra Pradesh, which accounts for about a third of the country’s microloans, have accused lenders of impoverishing customers.  Stories proliferated in the local news media about women who had amassed debts of $1,000 or more as loan officers cajoled them into borrowing more than they could afford and then browbeat them to repay.  Many had used the money to pay for televisions or health care or to soften the blow of failed crops, rather than as seed money for businesses. 

Microcredit firms in India were also accused of siphoning borrowers from government-run “self-help groups”  women’s organizations that can borrow small amounts at subsidized interest rates from government-owned banks. 

The movement against microcredit was started by opposition politicians, who have encouraged borrowers not to repay their loans and have accused senior leaders of the ruling Congress Party of being in cahoots with lenders.  The Congress-led state government made the cause its own and passed a tough new law in December to cap interest rates and regulate collections. 

Image Credit... The New York Times

The crisis has had ripples across the nation.  Banks, the primary source of money for microlenders, have turned off the tap because they are worried about the industry’s future.  As a result, microlenders have slowed or stopped lending nationwide.