The term lsquo Micro finance rsquo frequently appears in newspapers Micro finance includes 1 Small l...........

Economic Affairs Financial Inclusion

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The term ‘Micro-finance’ frequently appears in newspapers. Micro-finance includes

1. Small loans

2. Small deposits

3. Money transfer

4. Payment services

Select the correct answer using the codes given below.

1, 2 and 3 only

1 ,3 and 4 only

2 ,3 and 4 only

1 ,2, 3 and 4

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Explanation:

Microfinance is an economic development tool whose objective is to assist the poor to work their way out of poverty. It covers a range of services which include, in addition to the provision of credit, many other services such as savings, insurance, money transfers, counseling, etc.

The essential features of credit for Microfinance which have evolved are as under : -

The borrowers are low-income groups.
The loans are for small amounts.
The loans are without collateral.
The loans are generally taken for income-generating activities, although loans are also provided for consumption, housing and other purposes.
The tenure of the loans is short.
The frequency of repayments is greater than for traditional commercial loans.