Microfinance is the provision of financial services to people of low-income groups. This includes both the con-summers and the selfemployed. The service/services rendered under micro- finance is/are:1. Credit facilities.2. Savings faculties.3. Insurance facilities.4. Fund transfer faculties.Q.Select the correct answer using the codes given the lists:a)1 only.b)1 and 4 only.c)2 and 3 only.d)1,2 ,3 and 4.Correct answer is option 'D'. Can you explain this answer?

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Microfinance is the provision of financial services to people of low-income groups. This includes both the con-summers and the selfemployed. The service/services rendered under micro- finance is/are:
1. Credit facilities.
2. Savings faculties.
3. Insurance facilities.
4. Fund transfer faculties.
Q. Select the correct answer using the codes given the lists:

a)
1 only.
b)
1 and 4 only.
c)
2 and 3 only.
d)
1,2 ,3 and 4.

Correct answer is option 'D'. Can you explain this answer?

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Microfinance is the provision of financial services to people of low-i...

Micro finance is the provision of a wide range of financial services, such as deposits, loans, and insurance. The basic principle of micro finance is a provision of a package of financial services to low-income households. Microcredit (which is a component of micro finance) is a provision of credit facilities to low income household. The basic principle of micro credit is to give poor people access to capital and exploit their capacities and potentialities for economic development. The fundamental difference between these two terms are understanding of poor people economy and livelihood conditions. Thus, microfinance covers the acute need of poor people's financial services and protect from being further vulnerable but micro credit seems to be more technical and standalone approach to provide only credit services.

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Microfinance is the provision of financial services to people of low-i...

Microfinance is the provision of financial services to people of low-income groups, including both consumers and the self-employed. These services aim to improve financial inclusion, reduce poverty, and promote economic development. The services rendered under microfinance include credit facilities, savings facilities, insurance facilities, and fund transfer facilities.

1. Credit facilities:
- Microfinance institutions provide small loans to low-income individuals who may not have access to traditional banking services. These loans are typically used for income-generating activities or to meet personal financial needs.
- The loans are usually provided without collateral, relying on the borrower's character and ability to repay the loan.
- Microfinance institutions also offer group lending, where individuals form small groups to guarantee each other's loans, promoting social cohesion and collective responsibility.

2. Savings facilities:
- Microfinance institutions encourage low-income individuals to save money by providing them with safe and accessible savings accounts.
- These accounts allow individuals to accumulate savings, build financial resilience, and plan for future expenses.
- Savings facilities also help individuals develop a habit of saving, which can contribute to long-term financial stability and empowerment.

3. Insurance facilities:
- Microfinance institutions offer insurance products tailored to the needs of low-income individuals.
- These insurance schemes provide protection against various risks, such as illness, accidents, crop failure, and natural disasters.
- Insurance facilities help low-income individuals manage and mitigate risks, reducing their vulnerability to financial shocks.

4. Fund transfer facilities:
- Microfinance institutions facilitate secure and efficient fund transfers, allowing individuals to send and receive money domestically and internationally.
- These services enable low-income individuals to access remittances from family members working in other regions or countries.
- Fund transfer facilities also support business transactions and financial transactions, contributing to economic growth and development.

In conclusion, microfinance encompasses a range of financial services, including credit facilities, savings facilities, insurance facilities, and fund transfer facilities. These services are designed to empower low-income individuals, improve financial inclusion, and promote economic development. Therefore, the correct answer to the given question is option 'D' - 1, 2, 3, and 4.

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Read the information given below carefully and answer the following question.Financial inclusion plays a crucial role in inclusive development and sustainable prosperity as is being increasingly recognised and acknowledged globally. Large segment of population need to be part of formal payment system and financial markets. Financial inclusion would also broaden and deepen financial savings and lead to higher economic development.Previous initiatives: While financial sector policies in India have long been driven by the objective of increasing penetration and outreach, the goal of inclusion has eluded us. About 41 per cent of adult population remain unbanked and the number of loan account covers only 14 percent of adult population. The previous initiatives included (i) the expansion of network of cooperative banks to provide credit to agriculture and saving facilities in rural areas, (ii) nationalism of bank in 1969 and expansion of branches and (iii) creation ofan elaborate framework of priority sector lending with mandated targets as part of a strategy to meet the savings and credit needs of large section of the Indian population who had no access to institutional finance. Given the sheer enormity of the challenge, however the outcomes of these efforts have so far been mixed.Recent initiatives/out of the box approaches: Recent initiative include (i) “no frill” account for retail purpose; (ii) simplified KYC (Know Your Customer) (iii) Credit counselling centre facilities; (iv) use of NGOs and formation of SHGs; (v) Kisan credit cards service and (vi) extension of smart cards. The finance Minister in his Budget Speech of 2007-08 also laid down provision for funding of financial inclusion goals. The Rangarajan Committee also spelt out priorities for meeting financial inclusion objectives. Two of the more important approaches in the recent times included the use of technology such as smart cards and mobile telephone banking. The potential for their spread can be vast especially in combination with banking correspondence approach launched recently.New entry and competition: In addition, new competition and entry also play crucial roles, as is evident from the global experience. Two particular initiatives have included the role of Micro Financial Institutions (MFIs) and Non-Bank Finance Companies (NBFCs). MFI activities have surged in recent years, but has come under scrutiny and regulation. Services expanded at a fast rate, providing access on better terms than the alternatives of traditionalmoney lenders. However, better regulation is also needed. On NBFCs, gold pawn establishment have also provided alternate access and are fast expanding in urban and semi-urban settings. As far as caps on interest rates are concerned, as in case of other products, ‘subsidies’ in the form of low interest are often an inhibitor of access to services because of rationing and misuse.Financial Literacy: Any policy initiative seeking to afford greater access to financial services to financial services to a large segment of the population must necessarily address bridging the existing knowledge gap in financial education and literacy. Over the last decade or so, researcher all over the world, especially in the developed countries, have, therefore, started to study and explore whether individuals are wellequipped to make financial decisions. Financial education and literacy assumes urgency in any given scenario.Q.Which of the following would be closest to the meaning of term financial inclusion?

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Consider the following statements: Microfinance Institutions are financial companies that provide small loans to people who do not have any access to banking facilities. In India, all loans that are below Rs.2 lakh can be considered as microloans. Which of the statements given above is/are correct?

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Essential facilities like electricity, public transport, schools and colleges that are necessary and that need to be provided for everyone are called

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The agricultural production in different parts of India is very much affected by varying intensities of floods and droughts. Which one of the following measures would not be sustainable in this respect? (

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What are public facilities, and why are they considered essential for a nation?Private services for individual needsb Government provided services for collective needsC Luxury amenities for the wealthyd Exclusive facilities for urban areas?

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Microfinance is the provision of financial services to people of low-income groups. This includes both the con-summers and the selfemployed. The service/services rendered under micro- finance is/are:1. Credit facilities.2. Savings faculties.3. Insurance facilities.4. Fund transfer faculties.Q.Select the correct answer using the codes given the lists:a)1 only.b)1 and 4 only.c)2 and 3 only.d)1,2 ,3 and 4.Correct answer is option 'D'. Can you explain this answer?

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Microfinance is the provision of financial services to people of low-income groups. This includes both the con-summers and the selfemployed. The service/services rendered under micro- finance is/are:1. Credit facilities.2. Savings faculties.3. Insurance facilities.4. Fund transfer faculties.Q.Select the correct answer using the codes given the lists:a)1 only.b)1 and 4 only.c)2 and 3 only.d)1,2 ,3 and 4.Correct answer is option 'D'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Microfinance is the provision of financial services to people of low-income groups. This includes both the con-summers and the selfemployed. The service/services rendered under micro- finance is/are:1. Credit facilities.2. Savings faculties.3. Insurance facilities.4. Fund transfer faculties.Q.Select the correct answer using the codes given the lists:a)1 only.b)1 and 4 only.c)2 and 3 only.d)1,2 ,3 and 4.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Microfinance is the provision of financial services to people of low-income groups. This includes both the con-summers and the selfemployed. The service/services rendered under micro- finance is/are:1. Credit facilities.2. Savings faculties.3. Insurance facilities.4. Fund transfer faculties.Q.Select the correct answer using the codes given the lists:a)1 only.b)1 and 4 only.c)2 and 3 only.d)1,2 ,3 and 4.Correct answer is option 'D'. Can you explain this answer?.

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