Grameen yet to bring micro-loans to D.C., a year after Muhammad Yunus announcement

Since its founding in 1976 by Muhammad Yunus, Grameen Bank has made more than $9 billion worth of micro-loans to 8 million poor and unemployed borrowers, a track record impressive enough to earn the man and bank the 2006 Nobel Peace Prize.

Its U.S. offshoot, however, has been unable to raise $6 million to bring Yunus’s banking for the poor to Washington.

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A year ago in April, Yunus visited D.C. and announced that he planned to open a local micro-lending center as he had in New York City, preferably in one of Washington’s poorer communities. The idea was to provide loans in small amounts to poor women — just as he had done in his home country of Bangladesh — so they could start their own businesses without having to pay fees and high interest rates required by check-cashing outfits.

Yunus was joined by corporate partners who pledged to aid the effort with $1.2 million in funding.

But in a year of fundraising since then, Grameen America has raised barely $100,000 more, leaving it about $4.7 million short of what it says is needed to open a D.C. location. Much of money originally committed to the D.C. effort has been redirected to expand Grameen America’s work in New York, where it is lending in Queens, Brooklyn, Manhattan and the Bronx.

Yunus resigned as managing director of Grameen Bank this month amid tension between the bank and the Bangladesh government, possibly related to his attempt to found a political party in 2007. The country’s central bank ordered his removal recently, citing his having worked beyond the national retirement age, and the country’s Supreme Court upheld that decision this month. Yunus has accused the government of trying to take control of the bank.

Grameen America is an independent entity, and Yunus remains its chairman. It aims to raise enough money in advance of opening new offices to operate them in perpetuity without additional grants or loans.

When Yunus visited Washington in April 2010, he said he thought about $2 million was needed to open an office here. He was joined by John G. Finneran Jr., general counsel at McLean-based Capital One Financial, who announced that the company would loan the bank $1 million to get a D.C. office started. Venture capital firm Advantage Capital Partners committed another $200,000.

But in October, Capital One agreed to allow the money to be used at Grameen’s New York offices after fundraising for the D.C. outfit did not adequately progress.

Officials from Grameen Bank say the organization still plans to open in Washington but that about $6 million is needed at the onset — three times the initial expectation, thanks to a change in its business plan — and the economic environment made fundraising difficult.

“We continue to support the Washington, D.C., community as they fundraise towards the goal of bringing a Grameen America branch to their city,” Stephen A. Vogel, Grameen America’s chief executive, said through a spokeswoman.

Capital One spokeswoman Tatiana Stead said the company is still pleased with its partnership with the organization. Capital One provided Grameen America with $75,000 in grants in 2009 and 2010 and plans to provide the group with a $55,000 grant this year.

“Grameen America’s growth and the execution of its business plan have been very impressive,” she said, noting that the bank has reached more than 5,000 borrowers in New York, disbursing $15 million in loans there. “That is a fourfold increase since 2009, and the portfolio is extremely strong.”