MICROFINANCE
Final Term Quiz # 1
Name: ____________________________
1. Why is microfinance crucial for small-scale farmers?
a. To help them buy needs and wants and expand their social status
b. To provide access to small loans and financial services, addressing
their unique needs
c. To encourage migration to urban areas
d. To ensure food security for the farmers
2. What is one key challenge in providing microfinance services to small-
scale farmers?
a. High interest rates
b. Insufficient demand for loans
c. Lack of traditional collateral
d. Lacks government subsidies
3. How does microfinance help mitigate the financial risks associated with
agriculture?
a. By offering financial products like insurance to protect against losses
b. By providing crop insurance and encouraging farmers to take more
risks
c. By avoiding risky agricultural investments altogether
d. By charging exorbitant interest rates
4. What is a common opportunity associated with microfinance in
agriculture?
a. Increased risk due to the cyclical nature of agriculture
b. Improved food security
c. Increase farming efficiency
d. Lower agricultural production cost
5. In the context of microfinance, what is "value chain integration"?
a. A financial product tailored for urban entrepreneurs
b. A strategy to create rural unemployment
c. A way to connect farmers to markets and enhance their income
d. A type of crop insurance
6. What is one challenge microfinance institutions face when providing
loans to small-scale farmers during planting and harvesting period?
a. Farmers don't need loans during these seasons
b. High interest rates on loans
c. Loans are readily available without challenges
d. Seasonal cash flow and repayment scheduling
7. Which of the following is a challenge for microfinance institutions when
serving geographically isolated farmers?
a. Easy access to rural areas
b. Low demand for loans
c. Costly and logistically challenging operations
d. Complicated client preferences
8. What is a common challenge in providing microfinance services in
agriculture due to the unpredictability of agricultural income?
a. Higher risk of loan defaults
b. Low comprehension from clients
c. Loan demand stability
d. High repayment rates
9. What does "financial inclusion" refer to in the context of microfinance?
a. Prioritizing farmers as Microfinance clients
b. Ensuring all farmers have access to credit
c. Supporting wealthy individuals in urban areas
d. Extending access to banking and credit services to underserved and
unbanked rural populations
10. Which agency in the Philippines oversees the regulation of
microfinance NGOs?
a. Department of Agriculture (DA)
b. Securities and Exchange Commission (SEC)
c. Central Bank of the Philippines (BSP)
d. Ministry of Rural Development
Score:
11. What is the primary goal of public-private partnerships (PPPs) in
agricultural development?
a. To maximize corporate profits to cater more MFI clients
b. To reduce government involvement in agriculture
c. To create obstacles for small-scale farmers
d. To enhance efficiency and promote infrastructure development
12. What is the primary focus of production cost-based lending in
agricultural microfinance?
a) Evaluating the borrower's credit history
b) Providing loans to cover specific agricultural production costs
c) Offering loans without assessing the borrower's needs
d) Providing technical assistance to reduce production cost in farming
13. Which of the following is a benefit of production cost-based lending?
a) Increased reliance on collateral
b) Mitigating financial risks for farmers
c) Reduced focus on responsible lending
d) Limited flexibility in loan terms
14. In cash flow-based lending, what is the primary factor considered when
determining the borrower's repayment capacity?
a) The borrower's social connections
b) The value of the borrower's assets
c) The borrower's credit score
d) The borrower's cash inflows and outflows
15. How does cash flow-based lending contribute to financial inclusion?
a) By extending credit to those with irregular income streams
b) By considering credit scores
c) By requiring high collateral
d) By charging high-interest rates
16. Cash flow-based lending helps reduce the risk of default by:
a) Ignoring the borrower's financial situation
b) Setting a rigid repayment schedule
c) Aligning loan repayments with the borrower's income cycle
d) Offering loans with high-interest rates
17. How can microfinance institutions support borrowers in cash flow-
based lending?
a) By providing financial literacy training and capacity-building support
b) By offering loans with variable interest rates
c) By ignoring the borrower's financial needs
d) By requiring a high credit score for all borrowers
18. How does cash flow-based lending promote responsible lending
practices?
a) By aligning loan terms with the borrower's cash flow and income
cycle
b) By offering loans with rigid, fixed terms
c) By providing loans without assessing repayment capacity
d) By charging high-interest rates
19. In the context of agri-value chains, what do impact investors focus on?
a. Solely financial returns
b. Balanced financial, social, and environmental impact
c. Exclusively environmental sustainability
d. Immediate profitability without long-term sustainability
20. What role do value chains play in connecting producers to markets?
a. They act as intermediaries, purchasing products from farmers
b. They create artificial barriers to market access for farmers
c. They ensure that farmers receive the highest market prices
d. They facilitate the connection between producers and markets