Deck 1: Microfinance and Self-Help Group Lending

Question 1

Which option blocks the poor to get bank loans?

A)Absence of collateral
B)High rates of interest
C)Complexity of procedure
D)None of the above

Answer 1

Absence of collateral

Question 2

Which of the following takes the decisions regarding loans and savings in a self-help group (SHG)?

A)Government
B)Non-government organisation
C)Bank
D)Group members

Answer 2

Group members

Question 3

The informal sector loans incorporate _______ .

A)State Bank of India
B)Moneylenders
C)NABARD
D)Both (A) and (B)

Answer 3

Moneylenders

Question 4

A small loan amount given to low-income households or groups is known as ________ .

A)Cash credit
B)Micro credit
C)Rural credit
D)Simple credit

Question 5

What is NOT an innovation likely to explain the high repayment rates of microcredit programs?

A)Promising larger and larger loans for borrowers in good standing
B)Public repayments
C)Strong competition between numerous microcredit programs to reduce interest rates
D)Starting repayments before investments are likely to have borne fruit

Question 6

What is NOT a potential limit of group lending?

A)Monitoring group members can be costly for borrowers
B)Group lending uses social sanctions instead of collateral foreclosure
C)Group lending brings added risks for borrowers, those of others members' default.
D)Exclusion of all group members after one of them default is too harsh a punishment.

Question 7

What is TRUE of group lending clause?

A)Dealing with groups instead of individuals reduces transaction costs for the bank
B)Group arrangements teach the bank a great deal about who is safe and who is risky
C)Group lending reduces inequality between borrowers: all benefit from the same interest rate
D)Group loans are always cheaper than individual loans

Question 8

What is NOT a source of difficulty in the estimation of the impact of microfinance projects?

A)we do not observe what would have happened in absence of the microfinance project
B)participants systematically differ from non participants in their propensity to benefit from micro-loans
C)microfinance programs are not located randomly, they are often located in disfavoured areas
D)microfinance programs are often targeted to women

Question 9

What does the microfinance model Not predict:

A)A decrease interest rates when repayment is regular & in time
B)Homogeneous risk groups
C)Self-selection of best borrowers
D)None of the above

Question 10

What is not a mechanism that contributes to the success of Micro- credits?

A)Dynamic incentives
B)Peer monitoring
C)Regular payment schedules
D)Collaterals

Question 11

In the self-help group, the loan and saving decisions are taken by

A)Government
B)Non-government organisation
C)Bank
D)Group members

Question 12

Micro credit or micro finance is a novel approach to bank with the poor. In this approach bank credit is extended to the poor through

A).Self Help Groups
B)Co-operative Credit Societies
C)RBI
D)Anganwadees

Question 13

Loans to poor people by banks have many limitations including lack of security and high operating cost. So to help them which type of finance system developed ?

A)Ponzi schemes
B)Micro Finance System
C)Money Laundering Schemes
D)Money tampering finance

Question 14

The following statements are related to Micro Finance System. Locate the wrong option ?

A)It provides micro credit having scope for small savings and remittance of funds
B)It based on the principle of livelihood creation
C)The livelihood mission means engaging in activities in a routine fashion to generate cash or non-cash income
D)None

Question 15

Who introduced the concept of Micro Finance in Bangladesh in the form of the "Grameen Bank"? He is the Nobel laureate known by many as the "father of micro finance systems".

A)C. D. Deshmukh
B)Amartya Sen
C)Muhammad Yunus
D)Sheik Haseena

Question 16

The beneficiaries of Micro finance business are _____________

A)Land Less labour
B)Marginal farmers
C)Vendors in the small markets
D)All the above

Question 17

The Micro Finance Institutions (MFI) differ from one another in terms of -

A)Product offering
B)Loan repayment Structure
C)Product offerings
D)All of these

Question 18

Indian Micro Finance Institutes (MFI) usually adopt the group-based lending models, which are of two types. SHG model and JLG model. SHG means Self Help Group and JLG means ?

A)Joint Liability Game
B)Josh Liability Group
C)Joint Loan Group
D)Joint Liability Group

Question 19

Who launched an 'India Micro-finance Platform', a portal on micro-finance activities across the country, with the assistance of World bank funds on 28^th June 2013 ?

A)SBI
B)ICICI
C)SIDBI
D)Exim Bank

Question 20

Self Help Group involves

A)Group of 5 to 20 people
B)Regular saving habits
C)Inter-lending within the group members
D)All of above

Question 21

In microfinance the demand side constraints

A)Is lack of awareness
B)distance from bank branch
C)unsuitable product
D)communication

Question 22

In which year the Regional Rural Banks Act was passed?

A)1986
B)1976
C)1992
D)1988