What is the primary objective of Microfinance Institutions (MFIs) in India?
Show answer & explanation
Correct answer: A
Explanation
The Correct Answer is option 1 i.e. To offer financial assistance and services to low-income individuals and entrepreneurs.
The primary objective of Microfinance Institutions (MFIs) in India is to provide financial services to low-income individuals, especially those who lack access to traditional banking facilities. These services include small loans (microcredit), savings, insurance, and financial literacy programs. MFIs aim to empower women, small entrepreneurs, and rural communities by enabling them to start or expand businesses, improve livelihoods, and achieve financial independence. By promoting financial inclusion, MFIs play a key role in reducing poverty and supporting grassroots economic development. They operate under guidelines set by the Reserve Bank of India (RBI) and other regulatory bodies.
Other options :
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To fund government projects: This is done by public financial institutions, not MFIs.
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To generate profits for shareholders: MFIs may earn profits but their main goal is social impact, not shareholder profit.
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To provide financial services to large corporations: That is the role of commercial banks, not MFIs.