Which of the following statements is INCORRECT with regard to microfinance?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. MFIs are banks that provide micro financial services.
Microfinance Institutions (MFIs) are typically non-bank organizations that provide financial services to individuals and small businesses that do not have access to traditional banking. They offer small loans, savings, and other financial services, often targeting low-income or underserved populations.
The Reserve Bank of India (RBI) regulates MFIs, ensuring they operate within established guidelines. Microfinance also supports micro, small, and medium enterprises (MSMEs).