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Download Solution PDFMicrofinance is the provision of financial services to people of low-income groups. This includes both the consumers and the self-employed. The service/services rendered under microfinance is/are:
1. Credit facilities
2. Savings facilities
3. Insurance facilities
4. Fund Transfer facilities
Select the correct answer using the codes given below the lists:
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- 1 only
- 1 and 4 only
- 2 and 3 only
- 1, 2, 3 and 4
Answer (Detailed Solution Below)
Option 4 : 1, 2, 3 and 4
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Detailed Solution
Download Solution PDFThe correct answer is1, 2, 3 and 4.
![[Solved] Microfinance is the provision of financial services to peopl (2)](https://i0.wp.com/cdn.testbook.com/resources/lms_creative_elements/key-point-image.png "[Solved] Microfinance is the provision of financial services to peopl (2)")
Key Points
- Microfinance:
- Microfinance is a basis of financial services for entrepreneurs and small businesses deficient in contact with banking and associated services.
- The two key systems for the release of financial services to such customers include ‘relationship-based banking’ for individual entrepreneurs and small businesses along with ‘group-based models’ where several entrepreneurs come together to apply for loans and other services as a group.
- Similar to banking operation traditions, microfinance entities are supposed to charge their lender’s interests on loans.
- In most cases the so-called interest rates are lower than those charged by normal banks, certain rivals of this concept accuse microfinance entities of creating gain by manipulating the poor people’s money.
- This includes both the consumers and the self-employed.
- Microfinance apart from microcredit, the provision of small loans to poor clients also covers many other services.
- Micro Finance covers a wide range of services like credit facilities, savingfacilities, insurance facilities, remittance,Short duration loans, Fund Transferand also non-financial services like training, counseling etc. Hence, statements 1, 2, 3 and 4 are correct.
- Microfinance Institutions (MFIs) in India exist as NGOs (registered as societies or trusts), Section 25 companies and Non-Banking Financial Companies (NBFCs).
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