GU Microfinance Question paper Solution 2022
Gauhati University Microfinance Solved Question Paper 2022 for Bcom 4th Sem CBCS is an important resource for students who are preparing for their exams. This question paper provides a comprehensive understanding of the microfinance syllabus and the types of questions that are likely to be asked in exams.
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In addition, the Gauhati University Microfinance Solved Question Paper 2022 provides students with a comprehensive understanding of microfinance and its importance in the financial sector. By studying the paper, students can understand the concepts and theories of microfinance, and how they can be applied in real-world scenarios. This helps students to develop a deeper understanding of microfinance and its role in the financial sector.
Gauhati University B.Com 4th Sem Microfinance Solved Question Paper 2022
COMMERCE
(Honours Generic)
Answer the Questions from any one Option.
OPTION-B
Paper: COM-HG-4026
(Microfinance)
Full Marks: 80
Time: Three hours
The figures in the margin indicate full marks for the questions..
1. Choose the most appropriate answer of any ten questions from the multiple choices given against each: 1×10=10
(i) Which of the following is a correct statement with regard to microfinance?
(a) Microfinance is the provision of financial services to low income people.
(b) Microfinance extends financial support to poor women only.
(c) Microfinance extends financial support to the rural poor women only.
(d) Now of the above.
Ans: (a) Microfinance is the provision of financial services to low income people.
(ii)Microcredit includes
(a) small loans
(b) microsavings
(c) Both (a) and (b)
(d) Microinsurance
Ans: (c) Both (a) and (b)
(iii) Which of the following is not a microfinance product ?
(a) Microcredit
(b) Microsavings
(c) Microenterprise
(d) Microinsurance
Ans: (c) Microenterprise
(iv) Microcredit is provided for
(a)undertaking income generating activities
(b) household consumption
(c) construction of house
(d) All of the above
Ans: (d) All of the above
(v) Prof. Md. Yunus initiated
(a) group model
(b) grameen model
(c) cooperative model
(d) community banking model
Ans : (b) Grameen Model
(vi) "The rate of interest associated with the microcredit is higher compared to formal banks." The statement is
(a) True
(b) False
Ans: True
(vii) Microfinance is provided by
(a) cooperative bank.
(b) commercial bank.
(c) non-banking finance companies.
(d) All of the above.
Ans: (d) All of the above.
(viii) The concept of financial inclusion was first introduced in India in the year
(a) 2004
(b) 2005
(c) 2006
(d) 2007
Ans: 2005
(ix) Self Help Group - Bank Linkage programme was initiated by
(a) SBI
(b) NABARD
(c) SIDBI
(d) RBI
Ans: (b) NABARD
(x) Which of the following is not a financial risk?
(a) Credit risk
(b) Liquidity risk
(c) Operational risk
(d) Interest rate risk
Ans: (d) Interest rate risk
(xi) Microfinance extends its activities to
(a) rural areas
(b) urban areas
(c) Both (a) and (b)
(d) None of the above
Ans: Both (a) and (b)
(xi) The activities of microfinance in India is governed by
(a) the Cooperative Societies Act, 1904
(b) the Reserve Bank of India Act, 1934
(c) the Companies Act, 1956
(d) All of the above
Ans: (d) All of the above
(xiii) "Companies registered under section 8 of the Companies Act, 2013 are prohibited to distribute dividend to its members." This statement is
(a) True
(b) False
Ans: False
(xiv) The Reserve Bank of India was established in the year____.
(a) 1934
(b) 1935
(c)1949
(d) 1955
Ans : (b) 1935
(xv) The microfinance institution who got license to undertake pure banking activities in India was
(a) SEWA
(b) Bandhan Bank
(c) Basix
(d) SKS microfinance
Ans: (b) Bandhan Bank
2.Answer any five of the following questions in about 50 words each: 2x5 = 10
(a) Write the meaning of microfinance.
Ans: Microfinance refers to the provision of financial services to low-income individuals or groups who are typically excluded from access to traditional banking services
(b) What is women empowerment ?
Ans: Women empowerment refers to the process of enabling women to take control of their lives, have equal rights and opportunities, and overcome social, economic, and political barriers that prevent them from reaching their full potential.
(c) What is financial inclusion?
Ans: Financial inclusion refers to the process of ensuring that all individuals and businesses, regardless of their income level or location, have access to a range of appropriate and affordable financial services.
(d) Distinguish between microfinance and microcredit.
Ans: Download Solved Paper 2022
(e) What are various types of non-financial services offered by microfinance institutions ?
Ans: Microfinance institutions can offer a range of non-financial services, such as business training and education, health and life insurance, and access to markets and technology.
(f) What is fund management?
Ans: Fund management refers to the process of managing investment portfolios, including stocks, bonds, and other securities, with the goal of generating returns for investors.
(g) Write two features of Self Help group.
Ans: Two features of Self Help groups are:
(1) they are comprised of small groups of individuals who pool their resources and support each other in achieving their financial goals, and
(2) They are typically organized and run by members, with an emphasis on democratic decision-making and mutual support.
(h) Write the full form of NABARD and NEDFI.
Ans: NABARD stands for National Bank for Agriculture and Rural Development, and NEDFI stands for North Eastern Development Finance Corporation
3. Answer any four of the following questions in about 200 words each: 5×4=20
(a) State the microfinance characteristics of Microfinance.
Ans: Microfinance refers to the provision of financial services such as loans, savings, and insurance to low-income individuals who are not served by traditional financial institutions. The following are the key characteristics of microfinance:
Small loan sizes: Microfinance institutions provide small loans to clients who have limited financial resources.
Focus on the poor: Microfinance institutions aim to serve low-income individuals who are often excluded from formal financial services.
Group-based lending: Microfinance institutions often utilize group-based lending methods, where a group of individuals are jointly responsible for repaying a loan.
Repayment linked to income generation: Repayment schedules are usually linked to the clients' income-generating activities to ensure the loans are affordable and sustainable.
Innovative financial products: Microfinance institutions often offer innovative financial products and services that cater to the specific needs of low-income individuals.
(b) State various sources of funds of microfinance institutions.
Ans: Microfinance institutions have various sources of funds, including:
Savings deposits: Microfinance institutions can accept savings deposits from clients, which can then be used to provide loans.
Donations: Microfinance institutions may receive donations from foundations, governments, and other organisations.
Equity financing: Microfinance institutions can raise funds through the sale of equity to investors.
Debt financing: Microfinance institutions can also raise funds through debt financing, such as bonds or loans from commercial banks.
Government subsidies: In some countries, governments may provide subsidies to microfinance institutions to support their operations.
(c) What are the objectives of microfinance?
Ans: The objectives of microfinance are as follows:
Poverty reduction: Microfinance aims to reduce poverty by providing financial services to low-income individuals.
Financial inclusion: Microfinance seeks to include low-income individuals who are often excluded from formal financial services.
Economic empowerment: Microfinance helps to empower low-income individuals by providing them with access to financial services, which can enable them to start or grow their businesses.
Financial sustainability: Microfinance institutions aim to be financially sustainable by balancing their social goals with financial viability.
(d) Briefly discuss the Grameen Bank model of microfinance.
Ans: The Grameen Bank model of microfinance is a community-based approach to providing financial services to low-income individuals. This model was pioneered by Nobel Peace Prize winner Professor Muhammad Yunus in Bangladesh. The key features of the Grameen Bank model include group-based lending, where clients form small groups and are jointly responsible for repaying a loan, and a focus on empowering women, who are often excluded from formal financial services. The Grameen Bank model has been successful in reducing poverty and promoting financial inclusion, and has been replicated in many countries around the world
(e) Write a short note on SHG-Bank Linkage Programme.
Ans: The SHG-Bank Linkage Programme is a program in India that aims to link self-help groups (SHGs) with commercial banks. The program provides loans to SHGs, which are then disbursed to individual members. The program aims to provide financial services to low-income individuals who are often excluded from formal financial services. The program has been successful in promoting financial inclusion and reducing poverty in rural areas of India.
(f) State how operational efficiency and productivity can be measured.
Ans: Operational efficiency and productivity in microfinance institutions can be measured through various financial ratios, such as the loan-to-deposit ratio, the cost-to-income ratio, and the return on assets. Non-financial indicators, such as client satisfaction and outreach, can also be used to measure performance.
(g) Explain the needs for regulation of microfinance and microfinance institutions in India.
Ans: The regulation of microfinance and microfinance institutions is necessary in order to ensure the stability and sustainability of the sector, protect clients, and promote financial inclusion. In India, the Reserve Bank of India (RBI) is the primary regulator of microfinance institutions. The RBI regulates the sector by setting rules and guidelines for operations, capital requirements, and consumer protection. The RBI also supervises microfinance institutions to ensure they are operating in a safe and sound manner. The regulation of the sector is important to maintain public trust and confidence in microfinance institutions, and to ensure that they are providing financial services in an ethical and transparent manner.
(h) Briefly explain the performance management of microfinance institutions.
Ans: The performance management of microfinance institutions involves monitoring and evaluating their financial and operational performance. This can be done through regular financial audits, risk assessments, and performance evaluations. Microfinance institutions should also regularly collect feedback from clients to assess the quality of their services and identify areas for improvement. Performance management is important for ensuring the long-term sustainability of microfinance institutions and for improving the financial services they provide to low-income individuals.
4.Answer any four of the following questions in about 600 words each : 10×4=40
(a) "Microfinance is the effective tool of socio-economic development of pour people." Explain the statement.
Ans: Microfinance refers to the provision of financial services, including loans, savings, insurance, and money transfers, to underserved communities and individuals who lack access to traditional banking services. This type of financial inclusion has been identified as an effective tool for socio-economic development for the poor because it addresses the financial needs of people living in poverty and enables them to improve their economic well-being.
The impact of microfinance on the socio-economic development of poor people can be seen in various ways:
Improved income: Microfinance provides access to credit, enabling poor people to start or expand their businesses, thereby increasing their income and improving their standard of living.
Empowerment of women: Microfinance often focuses on empowering women, who are often marginalized in traditional financial systems. This can lead to increased gender equality and improved socio-economic status for women.
Increased access to basic needs: With improved income, poor people are able to afford basic necessities such as food, shelter, education, and healthcare, thereby improving their quality of life.
Financial literacy: Microfinance also provides opportunities for financial education and training, helping people understand how to manage their finances and make informed financial decisions.
Community development: Microfinance often operates on a community-based model, encouraging local cooperation and mutual support. This can lead to increased social capital and community development.
In conclusion, microfinance has been identified as an effective tool for socio-economic development for the poor because it addresses the financial needs of people living in poverty, empowering them to improve their economic well-being and quality of life.
(b) Discuss the development of microfinance in India.
Ans: The development of microfinance in India has been marked by several significant milestones over the past few decades. Here are some key developments:
a. Early beginnings: Microfinance in India has its roots in the 1970s with the establishment of the Self-Employed Women's Association (SEWA), which provided microloans and other financial services to women in the informal sector.
b. Government support: In 1992, the Indian government established the National Bank for Agriculture and Rural Development (NABARD), which provided financial support to rural and informal sector microfinance organizations.
c. Emergence of MFIs: In the 1990s and early 2000s, a number of microfinance institutions (MFIs) were established in India, including Grameen Bank-inspired organizations like BRAC, and commercial MFIs like FINO and SKS Microfinance.
d. Regulation: In 2011, the Reserve Bank of India (RBI) established regulatory guidelines for microfinance in India, which helped to standardize and professionalize the industry.
e. Growth and challenges: The microfinance industry in India experienced significant growth over the next decade, with the number of microfinance borrowers increasing from 30 million in 2006 to over 200 million in 2020. However, the industry faced several challenges as well, including regulatory issues, high interest rates, and instances of over-indebtedness among borrowers.
f. Digital transformation: In recent years, technology and digital finance have played an increasingly important role in the development of microfinance in India, with the growth of digital-only microfinance providers like Paytm and Bharat Financial Inclusion (formerly SKS Microfinance).
Gauhati University B.Com 4th Sem Microfinance Solved Question Paper 2022
(c) Discuss the structure of microfinance institutions in India.
Ans: The structure of microfinance institutions in India varies, depending on the organization's size, mission, and focus. However, some common features of the structure of microfinance institutions in India include:
a. Non-profit vs. for-profit: Some microfinance institutions in India are non-profit organizations, such as self-help groups (SHGs) and non-government organizations (NGOs), while others are for-profit companies, such as commercial microfinance institutions (MFIs) and digital microfinance providers.
b. Group-based lending: Many microfinance institutions in India use a group-based lending model, where loans are made to a group of individuals who are responsible for each other's loans. This model has been shown to be effective in reducing the risk of default and improving repayment rates.
c. Field-based delivery: Microfinance institutions in India often use a field-based delivery model, where loan officers or agents go directly to clients in their communities to provide loans and other financial services. This allows organizations to build strong relationships with clients and provide services in a convenient and accessible way.
d. Tiered structure: Some larger microfinance institutions in India have a tiered structure, where loans are provided by field-level agents, and collections and administration are handled by higher-level staff. This allows organizations to efficiently scale their operations while still providing personalized services to clients.
e. Partnership with banks: Many microfinance institutions in India partner with commercial banks to access funding and provide services to clients. This can help organizations to overcome some of the challenges of funding and regulation.
Overall, the structure of microfinance institutions in India is diverse and adapted to the needs of the organizations and their clients. The focus of microfinance institutions in India is on providing accessible and affordable financial services to the poor and underserved populations in the country.
(d) Give a detailed account on various models of microfinance institutions.
Ans:
(e) "NABARD has played an important role in the promotion of microfinance in India." Discuss.
Ans:The National Bank for Agriculture and Rural Development (NABARD) has played a significant role in promoting microfinance in India. Here are some ways in which NABARD has contributed to the development of the microfinance sector in India:
Financial support: NABARD has provided financial support to microfinance institutions (MFIs) through refinancing and grant support, which has helped these organizations expand their reach and provide microfinance services to more people.
Capacity building: NABARD has conducted various training programs and workshops to build the capacity of MFIs and their staff, which has helped improve the quality of microfinance services.
Research and advocacy: NABARD has undertaken research on various aspects of microfinance and used its findings to advocate for policies and practices that support the growth of the sector.
Partnership with other organizations: NABARD has partnered with other organizations, such as the Reserve Bank of India, commercial banks, and state governments, to promote microfinance in India.
Promotion of microfinance in rural areas: NABARD has made a special effort to promote microfinance in rural areas, recognizing its importance in addressing poverty and promoting financial inclusion.
In conclusion, NABARD's support has been instrumental in the development of microfinance in India, and has helped to make it a key tool for poverty reduction and financial inclusion in the country.
(f) Discuss various problems of microfinance. Give some suggestions to overcome these problems.
Ans: Problems of Microfinance:
❖High Interest Rates: The high interest rates associated with microfinance can make it difficult for low-income individuals to repay their loans.
❖Overindebtedness: In some cases, microfinance clients may take out multiple loans from different sources, leading to overindebtedness.
❖Lack of Financial Literacy: Many microfinance clients may not have the financial literacy needed to effectively manage their loans and other financial products.
❖Lack of Access to Formal Financial Institutions: In many areas, low-income individuals may not have access to formal financial institutions, making it difficult for them to access financial services.
❖Lack of Transparency: Some microfinance institutions may not be transparent about the terms and conditions of their loans, making it difficult for clients to understand the true cost of their loans.
❖ Suggestions to overcome these problems:
❖Implementing Financial Literacy Programs: By offering financial literacy programs, microfinance institutions can help their clients to better understand the financial products they are using and make more informed decisions.
❖Encouraging Competition: Encouraging competition in the microfinance sector can help to reduce interest rates and increase transparency.
❖Improving Access to Formal Financial Institutions: By improving access to formal financial institutions, low-income individuals can have more options for accessing financial services.
❖Regulating Microfinance Institutions: Governments can regulate microfinance institutions to ensure that they are transparent about the terms and conditions of their loans and that they are acting in the best interest of their clients.
(g) What are various types of risks associated with microfinance? Explain how these risk can be managed.
Ans: Types of Risks associated with Microfinance:
❖Credit Risk: The risk that a borrower will default on a loan.
❖Liquidity Risk: The risk that a microfinance institution will not have sufficient liquidity to meet its obligations.
❖Operational Risk: The risk that a microfinance institution will not be able to operate effectively due to a lack of resources or other operational issues.
❖Reputation Risk: The risk that a microfinance institution will suffer damage to its reputation as a result of negative publicity or other issues.
❖Market Risk: The risk that changes in market conditions will negatively impact the financial performance of a microfinance institution.
❖ Managing these Risks:
❖Sound Credit Risk Management Practices: By implementing sound credit risk management practices, microfinance institutions can minimize the risk of borrower default.
❖Maintaining Adequate Liquidity: By maintaining adequate liquidity, microfinance institutions can ensure that they have sufficient funds to meet their obligations.
❖Improving Operational Efficiency: By improving operational efficiency, microfinance institutions can reduce their operational risk.
❖Protecting Reputation: By protecting their reputation, microfinance institutions can reduce the risk of negative publicity and damage to their brand.
❖Monitoring Market Conditions: By monitoring market conditions, microfinance institutions can prepare for potential market risks and take steps to minimize their impact.
Gauhati University B.Com 4th Sem Microfinance Question Paper Solution 2022
(h)What is impact assessment ? Explain how impact assessment helps in measuring social performance.
Ans: Impact assessment is the process of evaluating the effects of an intervention or program on various outcomes. It is used to measure the effectiveness of a program in achieving its intended goals, as well as to identify any unintended consequences of the program.
Impact assessment helps in measuring social performance by evaluating the effects of a microfinance program on various social outcomes, such as poverty reduction, gender equality, empowerment, and financial inclusion. Here are some specific ways that impact assessment can help measure social performance:
a. Identifying social outcomes: Impact assessment helps to identify the specific social outcomes that a microfinance program is intended to achieve, such as poverty reduction, gender equality, or financial inclusion.
b. Measuring progress: Impact assessment allows organizations to measure progress towards achieving these social outcomes by tracking changes in various indicators, such as the number of people lifted out of poverty, the increase in women's empowerment, or the growth of financial inclusion.
c. Evaluating effectiveness: Impact assessment can be used to evaluate the effectiveness of a microfinance program in achieving its intended social outcomes. This allows organizations to make informed decisions about program design, resource allocation, and future direction.
d. Addressing unintended consequences: Impact assessment also helps organizations to identify and address any unintended consequences of a program, such as increases in debt levels or changes in gender dynamics. This allows organizations to adjust their programs to minimize negative impacts and maximize positive outcomes.
Overall, impact assessment is a critical tool for measuring the social performance of microfinance programs. By providing valuable data and insights, impact assessment helps organizations to ensure that they are achieving their intended goals and making a positive impact on the lives of their clients.
(i) Discuss various laws governing microfinance activities in India.
Ans:
(i) Discuss various provisions of the Microfinance Institutions (Development and Regulation) Bill, 2012 with regard to microfinance in India.
Ans: The Microfinance Institutions (Development and Regulation) Bill, 2012 aimed to provide a regulatory framework for the microfinance sector in India. The key provisions of the bill included the following:
❖Definition of Microfinance Institutions (MFIs): The bill defined MFIs as entities engaged in providing microfinance services, including self-help groups, non-banking financial companies, and other entities.
❖Regulation of MFIs: The bill established a regulatory authority, the Microfinance Development and Regulation Authority (MDRA), with the power to regulate MFIs and enforce compliance with regulations.
❖Licensing of MFIs: The bill required MFIs to obtain a license from the MDRA, and stipulated conditions for such a license, including minimum capital requirements and fit-and-proper criteria for directors.
❖Prudential norms for MFIs: The bill set out prudential norms for MFIs, including restrictions on loan-to-value ratios, caps on interest rates, and requirements for loan disbursement and repayment.
❖Consumer protection: The bill aimed to enhance consumer protection by setting out rules for fair and transparent lending practices, including disclosure of loan terms and conditions and the provision of grievance redressal mechanisms.
❖Supervision and enforcement: The bill provided for the appointment of examiners to inspect the books of MFIs and investigate complaints, and empowered the MDRA to take enforcement action against MFIs that violated regulations.
Overall, the Microfinance Institutions (Development and Regulation) Bill, 2012 aimed to promote the growth of the microfinance sector in India while ensuring its stability and protecting the interests of microfinance clients.
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| Overall, the Gauhati University Microfinance Solved Question Paper 2022 is a valuable resource for students preparing for their exams. It provides a clear understanding of the syllabus, helps students to score good marks, and provides an opportunity to practice and improve their problem-solving skills. |