The personification of climate change, unimaginable poverty and simmering religious extremism; Bangladesh doesn’t really have much going for it. And now we have even less. The Supreme Court’s decision to back the Central Bank’s dismissal of Grameen Bank Managing Director Mohammad Yunus, the pioneer of highly-controversial microcredit, has stunned civil society in Bangladesh and potentially done the country more harm them good.

The Nobel Laureate was unceremoniously relieved of his duties last month with a letter from the Central Bank (on request from the Ministry of Finance) citing a breach of contract. The septuagenarian, self-proclaimed “banker to the poor” was kicked out for being 10 years past the required age of retirement, 60, civil servants said. Internationally, the government’s actions have been frowned upon and seen as arbitrary and capricious – an embodiment of governance in today’s Bangladesh.

Yunus first came under attack late last year after a Danish documentary accused him of embezzling Norweigen government aid money. Oslo later cleared Yunus and Grameen Bank of any financial impropriety, but the damage had been done. The Bangladesh media lashed out and the government pounced to remove the man they linked closely with the interim (military-backed) government of 2007, which arrested the current Prime Minister on allegations of extortion. Yunus further exacerbated the situation by forming his own political party. His campaign failed; the gloves came off. The Prime Minister Sheikh Hasina, who in 2009 brought her arch-rival Khaleda Zia to tears on national television, was now after Yunus’s neck. In 2010 she publicly proclaimed him as “blood-sucker of the poor.”

However, Mohammad Yunus we have to understand is more than just a managing director of a bank. He is, and I fear I am stating the obvious, MOHAMMAD YUNUS, a Bengali and a Muslim, who until now was the only squeaky clean ambassador of the nation. His high-profile removal from office (for which he must partly share the blame) has done more to tarnish the image of Bangladesh than the 2005 serial bomb attacks or the countrywide protests against women’s inheritance rights earlier this week by religious extremists. Similarly, microcredit is more than just a service that provides small loans to the poor. It’s an idea, home grown, to help deal with one of society’s biggest challenges, rural poverty. It is as quintessentially Bangladeshi as cucumber sandwiches and industrialisation were British, and we ought to be proud of it. Today, we stand to lose all that.

As a sombre Grameen Bank recovers from the shock of losing its public face, others in the microfinance industry wait nervously to see the impact the Central Bank’s order will have on foreign aid flow into Bangladesh. Last month, the World Bank froze over $500 million of funding because of concerns over governance. Microfinance institutions too will no doubt come under tougher scrutiny. Time to reflect on the last 20 years of exponential growth though is perhaps just what the industry needs. Bangladesh microfinance has a long, hard battle ahead to make sure it doesn’t fall victim to mission drift as has been the case in India and Mexico where privatisation has capitalised on the helplessness of the poor.

Whilst the national media and the government attacked Yunus’s integrity and legitimacy, the international press now took a swing at microcredit itself.  From the start, microcredit was hugely misunderstood as a concept. It was never meant to be a panacea to alleviate poverty. It was part of a multi-faceted approach and as such, it worked. However, when the money came rolling in from donors, nobody checked the expansion of the industry. Microcredit stole the limelight and bullied other equally important development issues off the agenda and became the lone silver bullet in the hunt to end poverty. When that bullet missed its mark, the onslaught began from all quarters. The government, instead of protecting the country’s most well respected celebrity, only dug its knife in deeper.

Yunus’s response to the controversy that has surrounded him since the Danish documentary, Caught in Microcredit, has been calm and measured. His uncharacteristic silence and humility over the last few months has risen above the belligerence of a government that practises bulldozer politics, and not diplomacy. Consequently, most hope that Yunus will clear his name and gracefully step down from office, allowing fresh thinkers to mould the future. The question now is whether the 65-year-old Prime Minister will follow in his footsteps.

Misha Hussain is a British journalist based in Dhaka, Bangladesh.

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