Which of the following is the role of micro finance institutions?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. Offering financial services to the low-income group.
“Offering financial services to the low-income group.” Microfinance Institutions (MFIs) play a vital role in providing small loans, savings, insurance, and credit facilities to low-income individuals and small entrepreneurs who lack access to traditional banking services. They empower people, especially women, in rural and semi-urban areas to start small businesses and improve their livelihoods. For example, organizations like Grameen Bank and SKS Microfinance have successfully uplifted millions from poverty.
The other options are incorrect because:
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MFIs do not serve high-income groups, as they already have bank access.
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They don’t finance other financial institutions, as that’s the role of development banks.
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They do not serve foreigners, since their focus is domestic financial inclusion for the poor.