Following the removal of its founder Muhammad Yunus from the Grameen Bank, growing concerns about the future of the bank are prompting some depositors to withdraw their savings. Indeed many analysts and industry experts cautioned that a sudden exit of Yunus from Grameen and a legal battle between its board and the government may dent borrowers' confidence, jeopardising the organisation's future. This is a matter of concern for the financial system of Bangladesh as well as the global movement of microcredit- not to mention microcredit serves over 20 million poor households in Bangladesh and has the highest penetration of microcredit borrowers per square mile in the world.

The deadlock in Grameen could apparently take some time to settle given the deep political interest in the case. Consequently, the loss in depositors' confidence is not entirely unexpected. Moreover, financial institutions are the most vulnerable to such shocks, if history is any guide.

According to MIX market, a web-based microfinance information platform, Grameen Bank, which championed the idea of collateral-less credit, has over US$ 1.2 billion deposits entrusted by eight million depositors, mostly small savers.

There is another concern as far as Grameen Bank's lending programmes are concerned. Like depositors, if the debtors assume that the stalemate is not likely to end soon, it may prompt some borrowers to refuse to repay the loans, eventually defaulting on their debts.

Such a 'moral hazard' problem is highly prevalent across the world. The prevailing situation with regard to microfinance in Andhra Pradesh of India - where a punitive ordinance against microfinance business de facto barred microfinance institutions (MFI) from operating in the state - reinforces the doubt. In the name of protecting borrowers' interests, the politicisation of microcredit in India's fourth largest province led to widespread defaults and a major crisis in the country's microfinance industry.

Within less than a week of this incident the PM called Mohammad Yunus a "blood-sucker" and the government-backed onslaught was afoot. A government review committee was formed to look into GB's work; a former employee of Yunus, and a known critic, was appointed to the bank's chair; and the central bank issued a letter removing Yunus as managing director of GB.

Yunus went to the high court against the removal order - which was upheld on the ground that Yunus had crossed the age limit of 60 specified by banking law. The appeal to the appellate division will be heard on the 15th of this month.

Legalities aside, the attack on Yunus and his subsequent removal from the stewardship of the bank he founded has several implications that go far beyond the person. First of all, what is to become of GB? Will its present ownership and governing structure remain, or it will be fully taken over by the government?

Microfinance has grown from its origins as a pilot project that sought to demonstrate that the world's poor could benefit from access to the financial services we take for granted. It has since become a major part of the financial sector and national poverty-reduction strategies in a growing number of countries.

The successful effort to scale up this promising social innovation has drawn support from such visionaries as Nobel Peace Prize laureate Muhammad Yunus, founder of the Grameen Bank; Sam Daley-Harris, founder of RESULTS, who organized the Microcredit Summit in 1997; Ben Gilman, the former Republican congressman from New York, who backed the idea as early as 1986; and Democratic Rep. Rush Holt from New Jersey, who has been a tireless advocate for microfinance for more than a decade.

The Grameen Foundation has worked hard to advance promising microfinance institutions and ideas globally. It has also tried to present unbiased evidence that microfinance is an effective poverty-reduction strategy while advocating how it can reduce poverty more effectively. The foundation has produced two reports along these lines, the most recent being "Measuring the Impact of Microfinance: Taking Another Look." One of the many studies it analyzes compares districts in Bangladesh that experienced fast growth in microfinance clients over a three-year period with districts that had much slower growth. The fast-growing districts saw poverty rates drop more than three times faster than the slow-growing districts.

The tendency among those who promote social change is to remain silent about the shortcomings of the organizations they depend on, but Mr. Yunus chose another course. He has publicly criticized traditional aid models, supported by development agencies and international financial institutions, for channeling funding through government bureaucracy rather than directly to those most in need. If funds do reach the ground, they too often support government priorities, such as large-scale construction projects, rather than programs that empower the poor. He has also criticized his own government for corruption and ignoring the needs of the poor.

You may have read recently about Muhammad Yunus and a movement by politicians in Bangladesh to remove him from his position as Managing Director of Grameen Bank, which he founded. The Supreme Court in Bangladesh is due to hear his case this week.

About six years ago, when I was changing careers from the media business to nonprofit work, I read Professor Yunus's autobiography, Banker to the Poor. Like many others who have been inspired by his story, I now look back at that as a moment that changed my life. Reading his account helped deepen my understanding of global poverty - and how the poor could build better lives for their families. While Professor Yunus did not invent microcredit, he made important innovations and was an extraordinary advocate for microfinance as a way to enable even the poorest to have access to capital. He helped show that women were important engines of development and that the poor could be trusted to handle money responsibly, including paying off their microcredit loans.

Reading Banker to the Poor was a milestone in my journey to Trickle Up, which I joined in 2006. Of the many things that impressed me about Trickle Up was that Professor Yunus served on its Advisory Council. While our approach differs from Grameen's, due to the needs of the populations we serve, both Professor Yunus and Trickle Up founders Glen and Mildred Robbins Leet were pioneers in the 1970s and 1980s movements to empower the poor.