MCQ Sheet About Microfinance with Answers

1. What is microfinance?

(a) Provision of small loans and other financial services to the poor and underbanked
(b) A type of banking that focuses on large corporations and businesses (c) A way to
invest in the stock market (d) A type of insurance

Answer: (a)

2. Which of the following is a key principle of microfinance?

(a) Peer lending (b) High interest rates (c) Short repayment terms (d) Collateral
requirements

Answer: (a)

3. What is the repayment rate for microfinance loans?

(a) Over 90% (b) Over 80% (c) Over 70% (d) Over 60%

Answer: (a)

4. Which of the following is NOT a challenge facing microfinance institutions?

(a) High operating costs (b) Government regulations (c) Lack of access to capital (d)
High default rates

Answer: (d)

5. Microfinance has been shown to be effective in:

(a) Reducing poverty (b) Empowering women (c) Creating jobs (d) All of the above

Answer: (d)

6. Microfinance is a valuable tool for:

(a) The poor and underbanked (b) Small businesses (c) Developing countries (d) All
of the above

Answer: (d)
7. Which of the following is a pioneer in the field of microfinance?

(a) Muhammad Yunus (b) Grameen Bank (c) Both (a) and (b) (d) None of the above

Answer: (c)

8. Microfinance is a powerful tool for promoting:

(a) Financial inclusion (b) Sustainable development (c) Social justice (d) All of the
above

Answer: (d)

9. What is the average loan size in microfinance?

(a) Less than $500 (b) $500-$1,000 (c) $1,000-$2,000 (d) More than $2,000

Answer: (a)

10. Which of the following sectors all over the world is the largest recipient of
microfinance loans?

(a) Agriculture (b) Trade (c) Manufacturing (d) Services

Answer: (a)

11. What is the role of microfinance in poverty alleviation?

(a) Provides access to financial services (b) Helps people to start or grow their
businesses (c) Increases income and employment (d) All of the above

Answer: (d)

12. What are the challenges of providing microfinance to women?

(a) Lack of collateral (b) Legal and social barriers (c) Lack of financial literacy (d) All
of the above

Answer: (d)

13. What are the ways to improve the access of women to microfinance?
(a) Provide training in financial literacy (b) Design products and services tailored to
the needs of women (c) Partner with community-based organizations (d) All of the
above

Answer: (d)

14. What is the role of microfinance in sustainable development?

(a) Helps to reduce poverty (b) Promotes financial inclusion (c) Creates jobs and
economic growth (d) All of the above

Answer: (d)