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The Grameen Bank, founded in Bangladesh by Nobel Peace Prize Laureate, Dr. Muhammad Yunus, who is also credited for giving life to the concept of microcredit/microfinance, is one of the most popular models of social business, a business that operates primarily for addressing social needs and not for-profit. Based on the concept of microfinance, Grameen provides microloans, small loans, to the poor and those living beyond the reach of traditional finance, in order to promote income generating activities, avoiding the more traditional form of poverty alleviation - aid donations. The original focus of the Grameen Bank was on rural people with no credit history and no collateral. However, the bank rapidly expanded, giving the illusion of a win-win situation that yielded both profits for Grameen Bank and huge improvements in development for Bangladesh. Private, for-profit organizations around the world wrongly judged the situation, thinking that they could first and foremost profit from this type of venture while developing the country in the process. This view was indeed tainted since Grameen’s goal was development and any profits were an added bonus. Because of these wrong expectations, the Grameen model has achieved limited success in countries other than those in South-East Asia, though the concept of microfinance has had better luck, with many countries now running profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would. 
Which one of the following statements can be inferred about the for-profit microfinance institutions?
  • a)
    The coexistence of profit and development under the Grameen model was not interpreted correctly by such institutions
  • b)
    They are profitable models of social business.
  • c)
    They were responsible for the complete failure of Grameen as a model of microfinance.
  • d)
    Such institutions are not operational in Bangladesh.
  • e)
    Such institutions are not likely to offer loans to applicants who do not have any collateral security to offer.
Correct answer is option 'A'. Can you explain this answer?
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The Grameen Bank, founded in Bangladesh by Nobel Peace Prize Laureate,...
Passage Analysis
Summary and Main Point   
 
 
This is a Specific Inference question. We need to go back to refresh our understanding of the referred entity and look for an answer choice that matches our understanding. We know from the passage that these for-profit institutions:
  1. misunderstood the GB model (profit first, development on the side)
  2. Private, for-profit organizations around the world wrongly judged the situation, thinking that they could first and foremost profit from this type of venture while developing the country in the process.
  3. (some of them) charge significantly more interest rate on zero collateral loans than Grameen would
  4. profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would.
 
With this understanding in mind, let’s evaluate the answer choices.
Answer Choices
A
The coexistence of profit and development under the Grameen model was not interpreted correctly by such institutions
Correct
This choice matches the first point in our pre-thinking.  
B
They are profitable models of social business.
Incorrect: Opposite
The passage clearly states that a social business is one whose main focus is development and not profit. And we know that these for-profit organizations are first concerned with profit. So this choice goes against our understanding of the information given in the passage.
C
They were responsible for the complete failure of Grameen as a model of microfinance.
Incorrect: Inconsistent
Yes, these organizations misunderstood the GB model and hence were responsible for its failure in countries outside SE Asia. However, the GB model was very successful in SE Asia. But this choice states that GB model was a complete failure.
D
Such institutions are not operational in Bangladesh.
Incorrect: Out of Scope
There is no given information to conclude that these institutions are only operational in countries outside SE Asia.
E
Such institutions are not likely to offer loans to applicants who do not have any collateral security to offer.
Incorrect: Opposite
This information goes against the information given in the passage that states that such institutions charge high interest rates on loans given against zero collateral security. 
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The Grameen Bank, founded in Bangladesh by Nobel Peace Prize Laureate, Dr. Muhammad Yunus, who is also credited for giving life to the concept of microcredit/microfinance, is one of the most popular models of social business, a business that operates primarily for addressing social needs and not for-profit. Based on the concept of microfinance, Grameen provides microloans, small loans, to the poor and those living beyond the reach of traditional finance, in order to promote income generating activities, avoiding the more traditional form of poverty alleviation - aid donations. The original focus of the Grameen Bank was on rural people with no credit history and no collateral. However, the bank rapidly expanded, giving the illusion of a win-win situation that yielded both profits for Grameen Bank and huge improvements in development for Bangladesh. Private, for-profit organizations around the world wrongly judged the situation, thinking that they could first and foremost profit from this type of venture while developing the country in the process. This view was indeed tainted since Grameens goal was development and any profits were an added bonus. Because of these wrong expectations, the Grameen model has achieved limited success in countries other than those in South-East Asia, though the concept of microfinance has had better luck, with many countries now running profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would.According to the passage, which one of the following statements is true?

The Grameen Bank, founded in Bangladesh by Nobel Peace Prize Laureate, Dr. Muhammad Yunus, who is also credited for giving life to the concept of microcredit/microfinance, is one of the most popular models of social business, a business that operates primarily for addressing social needs and not for-profit. Based on the concept of microfinance, Grameen provides microloans, small loans, to the poor and those living beyond the reach of traditional finance, in order to promote income generating activities, avoiding the more traditional form of poverty alleviation - aid donations. The original focus of the Grameen Bank was on rural people with no credit history and no collateral. However, the bank rapidly expanded, giving the illusion of a win-win situation that yielded both profits for Grameen Bank and huge improvements in development for Bangladesh. Private, for-profit organizations around the world wrongly judged the situation, thinking that they could first and foremost profit from this type of venture while developing the country in the process. This view was indeed tainted since Grameens goal was development and any profits were an added bonus. Because of these wrong expectations, the Grameen model has achieved limited success in countries other than those in South-East Asia, though the concept of microfinance has had better luck, with many countries now running profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would.Which of the following best captures the main idea of the passage?

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The Grameen Bank, founded in Bangladesh by Nobel Peace Prize Laureate, Dr. Muhammad Yunus, who is also credited for giving life to the concept of microcredit/microfinance, is one of the most popular models of social business, a business that operates primarily for addressing social needs and not for-profit. Based on the concept of microfinance, Grameen provides microloans, small loans, to the poor and those living beyond the reach of traditional finance, in order to promote income generating activities, avoiding the more traditional form of poverty alleviation - aid donations. The original focus of the Grameen Bank was on rural people with no credit history and no collateral. However, the bank rapidly expanded, giving the illusion of a win-win situation that yielded both profits for Grameen Bank and huge improvements in development for Bangladesh. Private, for-profit organizations around the world wrongly judged the situation, thinking that they could first and foremost profit from this type of venture while developing the country in the process. This view was indeed tainted since Grameen’s goal was development and any profits were an added bonus. Because of these wrong expectations, the Grameen model has achieved limited success in countries other than those in South-East Asia, though the concept of microfinance has had better luck, with many countries now running profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would.Which one of the following statements can be inferred about the for-profit microfinance institutions?a)The coexistence of profit and development under the Grameen model was not interpreted correctly by such institutionsb)They are profitable models of social business.c)They were responsible for the complete failure of Grameen as a model of microfinance.d)Such institutions are not operational in Bangladesh.e)Such institutions are not likely to offer loans to applicants who do not have any collateral security to offer.Correct answer is option 'A'. Can you explain this answer?
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The Grameen Bank, founded in Bangladesh by Nobel Peace Prize Laureate, Dr. Muhammad Yunus, who is also credited for giving life to the concept of microcredit/microfinance, is one of the most popular models of social business, a business that operates primarily for addressing social needs and not for-profit. Based on the concept of microfinance, Grameen provides microloans, small loans, to the poor and those living beyond the reach of traditional finance, in order to promote income generating activities, avoiding the more traditional form of poverty alleviation - aid donations. The original focus of the Grameen Bank was on rural people with no credit history and no collateral. However, the bank rapidly expanded, giving the illusion of a win-win situation that yielded both profits for Grameen Bank and huge improvements in development for Bangladesh. Private, for-profit organizations around the world wrongly judged the situation, thinking that they could first and foremost profit from this type of venture while developing the country in the process. This view was indeed tainted since Grameen’s goal was development and any profits were an added bonus. Because of these wrong expectations, the Grameen model has achieved limited success in countries other than those in South-East Asia, though the concept of microfinance has had better luck, with many countries now running profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would.Which one of the following statements can be inferred about the for-profit microfinance institutions?a)The coexistence of profit and development under the Grameen model was not interpreted correctly by such institutionsb)They are profitable models of social business.c)They were responsible for the complete failure of Grameen as a model of microfinance.d)Such institutions are not operational in Bangladesh.e)Such institutions are not likely to offer loans to applicants who do not have any collateral security to offer.Correct answer is option 'A'. Can you explain this answer? for GMAT 2024 is part of GMAT preparation. The Question and answers have been prepared according to the GMAT exam syllabus. Information about The Grameen Bank, founded in Bangladesh by Nobel Peace Prize Laureate, Dr. Muhammad Yunus, who is also credited for giving life to the concept of microcredit/microfinance, is one of the most popular models of social business, a business that operates primarily for addressing social needs and not for-profit. Based on the concept of microfinance, Grameen provides microloans, small loans, to the poor and those living beyond the reach of traditional finance, in order to promote income generating activities, avoiding the more traditional form of poverty alleviation - aid donations. The original focus of the Grameen Bank was on rural people with no credit history and no collateral. However, the bank rapidly expanded, giving the illusion of a win-win situation that yielded both profits for Grameen Bank and huge improvements in development for Bangladesh. Private, for-profit organizations around the world wrongly judged the situation, thinking that they could first and foremost profit from this type of venture while developing the country in the process. This view was indeed tainted since Grameen’s goal was development and any profits were an added bonus. Because of these wrong expectations, the Grameen model has achieved limited success in countries other than those in South-East Asia, though the concept of microfinance has had better luck, with many countries now running profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would.Which one of the following statements can be inferred about the for-profit microfinance institutions?a)The coexistence of profit and development under the Grameen model was not interpreted correctly by such institutionsb)They are profitable models of social business.c)They were responsible for the complete failure of Grameen as a model of microfinance.d)Such institutions are not operational in Bangladesh.e)Such institutions are not likely to offer loans to applicants who do not have any collateral security to offer.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for GMAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The Grameen Bank, founded in Bangladesh by Nobel Peace Prize Laureate, Dr. Muhammad Yunus, who is also credited for giving life to the concept of microcredit/microfinance, is one of the most popular models of social business, a business that operates primarily for addressing social needs and not for-profit. Based on the concept of microfinance, Grameen provides microloans, small loans, to the poor and those living beyond the reach of traditional finance, in order to promote income generating activities, avoiding the more traditional form of poverty alleviation - aid donations. The original focus of the Grameen Bank was on rural people with no credit history and no collateral. However, the bank rapidly expanded, giving the illusion of a win-win situation that yielded both profits for Grameen Bank and huge improvements in development for Bangladesh. Private, for-profit organizations around the world wrongly judged the situation, thinking that they could first and foremost profit from this type of venture while developing the country in the process. This view was indeed tainted since Grameen’s goal was development and any profits were an added bonus. Because of these wrong expectations, the Grameen model has achieved limited success in countries other than those in South-East Asia, though the concept of microfinance has had better luck, with many countries now running profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would.Which one of the following statements can be inferred about the for-profit microfinance institutions?a)The coexistence of profit and development under the Grameen model was not interpreted correctly by such institutionsb)They are profitable models of social business.c)They were responsible for the complete failure of Grameen as a model of microfinance.d)Such institutions are not operational in Bangladesh.e)Such institutions are not likely to offer loans to applicants who do not have any collateral security to offer.Correct answer is option 'A'. Can you explain this answer?.
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Private, for-profit organizations around the world wrongly judged the situation, thinking that they could first and foremost profit from this type of venture while developing the country in the process. This view was indeed tainted since Grameen’s goal was development and any profits were an added bonus. Because of these wrong expectations, the Grameen model has achieved limited success in countries other than those in South-East Asia, though the concept of microfinance has had better luck, with many countries now running profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would.Which one of the following statements can be inferred about the for-profit microfinance institutions?a)The coexistence of profit and development under the Grameen model was not interpreted correctly by such institutionsb)They are profitable models of social business.c)They were responsible for the complete failure of Grameen as a model of microfinance.d)Such institutions are not operational in Bangladesh.e)Such institutions are not likely to offer loans to applicants who do not have any collateral security to offer.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of The Grameen Bank, founded in Bangladesh by Nobel Peace Prize Laureate, Dr. Muhammad Yunus, who is also credited for giving life to the concept of microcredit/microfinance, is one of the most popular models of social business, a business that operates primarily for addressing social needs and not for-profit. Based on the concept of microfinance, Grameen provides microloans, small loans, to the poor and those living beyond the reach of traditional finance, in order to promote income generating activities, avoiding the more traditional form of poverty alleviation - aid donations. The original focus of the Grameen Bank was on rural people with no credit history and no collateral. However, the bank rapidly expanded, giving the illusion of a win-win situation that yielded both profits for Grameen Bank and huge improvements in development for Bangladesh. Private, for-profit organizations around the world wrongly judged the situation, thinking that they could first and foremost profit from this type of venture while developing the country in the process. This view was indeed tainted since Grameen’s goal was development and any profits were an added bonus. Because of these wrong expectations, the Grameen model has achieved limited success in countries other than those in South-East Asia, though the concept of microfinance has had better luck, with many countries now running profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would.Which one of the following statements can be inferred about the for-profit microfinance institutions?a)The coexistence of profit and development under the Grameen model was not interpreted correctly by such institutionsb)They are profitable models of social business.c)They were responsible for the complete failure of Grameen as a model of microfinance.d)Such institutions are not operational in Bangladesh.e)Such institutions are not likely to offer loans to applicants who do not have any collateral security to offer.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for The Grameen Bank, founded in Bangladesh by Nobel Peace Prize Laureate, Dr. Muhammad Yunus, who is also credited for giving life to the concept of microcredit/microfinance, is one of the most popular models of social business, a business that operates primarily for addressing social needs and not for-profit. Based on the concept of microfinance, Grameen provides microloans, small loans, to the poor and those living beyond the reach of traditional finance, in order to promote income generating activities, avoiding the more traditional form of poverty alleviation - aid donations. The original focus of the Grameen Bank was on rural people with no credit history and no collateral. However, the bank rapidly expanded, giving the illusion of a win-win situation that yielded both profits for Grameen Bank and huge improvements in development for Bangladesh. Private, for-profit organizations around the world wrongly judged the situation, thinking that they could first and foremost profit from this type of venture while developing the country in the process. This view was indeed tainted since Grameen’s goal was development and any profits were an added bonus. Because of these wrong expectations, the Grameen model has achieved limited success in countries other than those in South-East Asia, though the concept of microfinance has had better luck, with many countries now running profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would.Which one of the following statements can be inferred about the for-profit microfinance institutions?a)The coexistence of profit and development under the Grameen model was not interpreted correctly by such institutionsb)They are profitable models of social business.c)They were responsible for the complete failure of Grameen as a model of microfinance.d)Such institutions are not operational in Bangladesh.e)Such institutions are not likely to offer loans to applicants who do not have any collateral security to offer.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of The Grameen Bank, founded in Bangladesh by Nobel Peace Prize Laureate, Dr. Muhammad Yunus, who is also credited for giving life to the concept of microcredit/microfinance, is one of the most popular models of social business, a business that operates primarily for addressing social needs and not for-profit. Based on the concept of microfinance, Grameen provides microloans, small loans, to the poor and those living beyond the reach of traditional finance, in order to promote income generating activities, avoiding the more traditional form of poverty alleviation - aid donations. The original focus of the Grameen Bank was on rural people with no credit history and no collateral. However, the bank rapidly expanded, giving the illusion of a win-win situation that yielded both profits for Grameen Bank and huge improvements in development for Bangladesh. Private, for-profit organizations around the world wrongly judged the situation, thinking that they could first and foremost profit from this type of venture while developing the country in the process. This view was indeed tainted since Grameen’s goal was development and any profits were an added bonus. Because of these wrong expectations, the Grameen model has achieved limited success in countries other than those in South-East Asia, though the concept of microfinance has had better luck, with many countries now running profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would.Which one of the following statements can be inferred about the for-profit microfinance institutions?a)The coexistence of profit and development under the Grameen model was not interpreted correctly by such institutionsb)They are profitable models of social business.c)They were responsible for the complete failure of Grameen as a model of microfinance.d)Such institutions are not operational in Bangladesh.e)Such institutions are not likely to offer loans to applicants who do not have any collateral security to offer.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice The Grameen Bank, founded in Bangladesh by Nobel Peace Prize Laureate, Dr. Muhammad Yunus, who is also credited for giving life to the concept of microcredit/microfinance, is one of the most popular models of social business, a business that operates primarily for addressing social needs and not for-profit. Based on the concept of microfinance, Grameen provides microloans, small loans, to the poor and those living beyond the reach of traditional finance, in order to promote income generating activities, avoiding the more traditional form of poverty alleviation - aid donations. The original focus of the Grameen Bank was on rural people with no credit history and no collateral. However, the bank rapidly expanded, giving the illusion of a win-win situation that yielded both profits for Grameen Bank and huge improvements in development for Bangladesh. Private, for-profit organizations around the world wrongly judged the situation, thinking that they could first and foremost profit from this type of venture while developing the country in the process. This view was indeed tainted since Grameen’s goal was development and any profits were an added bonus. Because of these wrong expectations, the Grameen model has achieved limited success in countries other than those in South-East Asia, though the concept of microfinance has had better luck, with many countries now running profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would.Which one of the following statements can be inferred about the for-profit microfinance institutions?a)The coexistence of profit and development under the Grameen model was not interpreted correctly by such institutionsb)They are profitable models of social business.c)They were responsible for the complete failure of Grameen as a model of microfinance.d)Such institutions are not operational in Bangladesh.e)Such institutions are not likely to offer loans to applicants who do not have any collateral security to offer.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice GMAT tests.
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