Which of the following statements is true about Micro Finance institutions?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. Majority of microfinancing operations occur in developing countries.
The correct statement about Microfinance institutions (MFIs) is:
“Majority of microfinancing operations occur in developing countries.”
-
Explanation: Microfinance institutions primarily provide small loans, savings, and other financial services to low-income individuals, especially in rural and underserved areas.
-
MFIs aim to promote financial inclusion and empower the poor, often targeting women and self-employed individuals who lack access to formal banking.
-
They do not provide jumbo loans or focus on high-income clients, and their services are distinct from conventional banking for employed or salaried people.
-
Countries in Asia, Africa, and Latin America have significant microfinance activity, making it a crucial tool for poverty alleviation and economic development.