Microfinance MCQs
Microfinance – MCQs with Answers & Explanations
Class: 11 |
Subject: Economics |
Section: Rural Development |
Topic: Microfinance |
Board: CBSE
These Multiple Choice Questions (MCQs) are designed strictly as per the NCERT syllabus, making them ideal for CBSE Class 11 Board Examinations. Each question includes detailed explanations for better concept clarity.
1. Microfinance refers to:
Answer: B
Microfinance provides small loans, savings, and insurance services to low‑income individuals lacking access to formal banking.
2. The main aim of microfinance is to:
Answer: B
Microfinance empowers the poor by providing credit for self‑employment and income generation.
3. SHG stands for:
Answer: B
Self Help Groups are small voluntary groups that pool savings and provide loans to members.
4. Microcredit is:
Answer: C
Microcredit involves providing small collateral‑free loans to the poor for productive activities.
5. The success of microfinance largely depends on:
Answer: B
SHG lending works on mutual trust and group liability instead of collateral.
6. Microfinance institutions mainly operate in:
Answer: B
They focus on financially excluded rural populations.
7. NABARD supports microfinance through:
Answer: A
It links Self Help Groups with banks for institutional credit.
8. Collateral‑free loans mean:
Answer: B
Borrowers need not pledge assets.
9. Microfinance promotes:
Answer: A
Loans help start small businesses.
10. Women are key beneficiaries because:
Answer: B
Women SHGs show strong repayment discipline.
11. Microfinance reduces dependence on:
Answer: B
It replaces exploitative informal credit.
12. Savings mobilization means:
Answer: B
SHGs pool member savings.
13. Joint liability implies:
Answer: B
Members repay collectively.
14. Microinsurance covers:
Answer: B
It protects low‑income groups.
15. The Grameen model originated in:
Answer: B
It pioneered group‑based lending.
16. Microfinance improves:
Answer: B
It connects the poor to formal finance.
17. Interest rates in microfinance are:
Answer: B
They cover costs but remain affordable.
18. Microfinance encourages:
Answer: B
Credit supports small enterprises.
19. SHG loans are usually used for:
Answer: B
They fund income‑generating activities.
20. Microfinance is a tool for:
Answer: A
It strengthens rural livelihoods and reduces poverty.