Dhaka, Bangladesh (CNN) -- Muhammad Yunus won a Nobel Peace Prize for the Bangladeshi bank he founded but now he finds himself in a bitter fight to retain his job.
Yunus pioneered microcredit financing and founded Grameen Bank nearly three decades ago in an effort to alleviate poverty by lending to the poor. He refused Wednesday to bow to government demands and resign from the bank that won him a Nobel in 2006.
"We established Grameen Bank through a special ordinance, with rules that are specific, according to which my current term as managing director is fully valid," he said. "Government has three representatives on the board and they have unanimously approved these rules."
Grameen caught the world's attention by specializing in providing loans to low-income entrepreneurs who were unable to secure money through regular banks. Yunus quickly gained a reputation as a "banker to the poor."
Bangladeshi Finance Minister Abul Mal Abdul Muhith said Yunus was too old to run the bank and should step down.
Nobel laureate in question
"Normally the retirement age of a bank's managing director in Bangladesh is 65, and Professor Yunus is now 70," Muhith said.
The pressure stems from allegations in a television documentary that Yunus illegally diverted Grameen money. Grameen denied the charges and Norway, a key bank donor, found no evidence of wrongdoing.
But the larger debate has been over the notion of microcredit itself. Its critics have charged that lenders were making big money off small loans.
Bangladeshi Prime Minister Sheikh Hasina minced no words when she compared Grameen's operations to "sucking the blood from the poor in the name of alleviating poverty."
"It is a question of explaining to her," Yunus told CNN in a recent interview. "She probably has no close connection to that, all the good things that microcredit has done globally, not just in Bangladesh."
Yunus has admitted serious problems that have surfaced recently in the world of microfinancing. Poor families have complained about debt burdens and loan sharks who charge an exorbitant interest.
Yunus conceded some lenders have taken advantage of the system. But, he insisted to CNN, that a few bad apples should not undermine the idea of microcredit.
"The idea will not disappear," he said. "It is a question of teething problems. It is a question of misuse and abuse of the idea."
Muhith said the push for Yunus' resignation had no link to politics, but many analysts say Yunus is still under fire for criticizing politicians and trying to form his own political party four years ago during an interim, unelected military-backed government. That party was later abandoned.
Yunus faces a defamation charge for comments he made four years ago to the French news agency that politicians were only in "power to make money."
Several prominent figures have stepped up in Yunus' defense, including Mary Robinson, the former Irish president and United Nations High Commissioner for Human Rights, who chairs a newly formed "Friends of Grameen" initiative.
"One of the priorities is also to support the independence of Grameen Bank and its founder Professor Yunus, who together were awarded the Nobel Peace Prize in 2006, as they have been the target of an ongoing pressure campaign of rumors and misleading information," the group said in a statement.
CNN's Sara Sidner and Moni Basu and journalist Farid Ahmed contributed to this report.
