Reporter David Chazan writes that I said that Grameen Bank needs $100 million "in order to survive." I said no such thing. Grameen Banks business is borrowing and lending. We lend an average of $35 million every month. In the past we borrowed about $200 million from the central bank of Bangladesh, raised $150 million by issuing bonds in the local capital market in 1995. Now we are in the process of raising money in the US capital market through securitization. IFC (International Finance Corporation, the private sector arm of the World Bank), is providing us assistance in entering the US market.

In the aftermath of the floods we estimate that we'll need $100 million immediately, not for Grameen's survival, as your report says, but for assisting in the survival of Grameen borrowers who are badly hit by the flood. For Grameen a natural disaster is a challenge, and an opportunity to demonstrate how effective microcredit system is in helping affected people back on their feet. Grameen Bank's survival is never the issue here. Anybody who is familiar with Grameen Bank knows that it is a robust and well-managed financial institution. This is not the first disaster Grameen has ever faced. Even when Grameen was much smaller than what we are today, and less experienced in disaster management, we successfully coped with disasters which badly mauled Grameen's less prepared borrowers during our 22 years' history. Floods of 1987 and 1988, cyclone of 1991, are some of the great national disasters we had to face in the past. Grameen Bank is institutionally built to cope with disasters. It has developed procedures which are emulated by others as a part of Grameen system. It is true that Grameen borrowers did not pay weekly installment during the flood period, as your correspondent reported, but what was not mentioned in the report that they were not required to pay those installments during that time under Grameen disaster rules.

To find the required $100 million we have already approached the central bank of Bangladesh for a short-term loan while we are looking for a long-term loan internationally, at commercial rate. We are not looking for $100 million bail-out from grant funds or low-interest loans, as the report implies.

The editorial ("Grameen Grief") claims that Grameen's focus has been "away from strict commercial viabilty." I wish you had a chance to read the World Bank publication "Is Grameen Bank Viable?" published several years back. As a matter of fact, we view commercial viability as an essential feature of Grameen-type micro-credit programs. Question of Grameen Bank itself not practicing it does not arise. Serious studies of our financial performance, including the World Bank study reports on the subject, bear this out.

The editorial claims that our focus has instead been on "grandiose and not very helpful schemes like the provision of mobile telephones in rural areas." Let me make two points about this. First, Grameen Bank does not own any equity in Grameen Phone, the mobile telephone company you refer to. It does not lend money to Grameen Phone either. This is a joint venture company with four international partners. They are: Norwegian telecommunication company Telenor, Marubeni of Japan, Gonophone of the USA, and Grameen Telecom of Bangladesh. Participating companies have put in $50 million, and a consortium of lenders formed by IFC, Asian Development Bank (ADB), and Commonwealth Development Corporation (CDC) has approved a loan of $50 million (on commercial terms, of course) Secondly, anybody who has any knowledge about the Grameen Phone will definitely not classify it as a "grandiose and not very helpful scheme". I believe that Grameen Phone will earn an impressive return for its investors, it will also serve the important role of bringing modern communications technology to rural Bangladesh and an opportunity to the poor women of Bangladesh to make money by selling telephone services to the villagers for the first time. (During the flood the Grameen women members who were selling telephone services earned twice as much compared to the normal time.) Grameen Phone is already cited as an example of how business can be formed to achieve social objectives. If you contact IFC, ADB, and CDC who did a thorough appraisal of the project before approving the loan, they will tell you whether they will agree with your classification. You can also contact the leaders of telecommunication industry to find out what they think about this business venture.

Considering the importance of the negative image of Grameen Bank that your report and editorial created in the minds of your readers, I would request that you give a closer look at Grameen Bank and see if you have been fair in your appraisal. If not, I'll request you to write another editorial giving the correct picture. In view of the Grameen Bank's importance in the global micro-credit movement it would be a great service to the cause of the credit to the poorest globally.