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Consider the following statements regarding the current status of microfinance institutions (MFIs) in India:
1. The gross non-performing assets (NPAs) in India's MFIs rose to 16% by March 2025, nearly doubling from 8.8% in 2024.
2. The Joint Liability Group (JLG) model has become more effective due to increased borrower accountability.
3. The Reserve Bank of India (RBI) has implemented stricter norms to stabilize the microfinance sector, resulting in short-term liquidity challenges for MFIs.
Which of the statements given above is/are correct?
  • a)
    1 Only
  • b)
    1 and 3 Only
  • c)
    1 and 2 Only
  • d)
    1, 2 and 3
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Consider the following statements regarding the current status of mic...
- Statement 1 is correct. The gross non-performing assets (NPAs) in India's microfinance institutions (MFIs) indeed rose to 16% by March 2025, which is nearly double the 8.8% recorded in 2024. This indicates a significant increase in defaults, signaling a potential crisis in the sector.
- Statement 2 is incorrect. The effectiveness of the Joint Liability Group (JLG) model has actually been declining due to changing borrower demographics and increased individual defaults, not becoming more effective. This weakening of the JLG model is contributing to the rising NPAs in the sector.
- Statement 3 is correct. The Reserve Bank of India (RBI) has introduced stricter norms to stabilize the microfinance sector. These regulations have led to short-term liquidity challenges for MFIs as they adapt to the new requirements.
Thus, the correct answer is Option B: 1 and 3 Only. This accurately reflects the current challenges faced by MFIs in India, including rising NPAs and regulatory pressures affecting liquidity.
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Consider the following statements regarding the current status of microfinance institutions (MFIs) in India:1. The gross non-performing assets (NPAs) in India's MFIs rose to 16% by March 2025, nearly doubling from 8.8% in 2024.2. The Joint Liability Group (JLG) model has become more effective due to increased borrower accountability.3. The Reserve Bank of India (RBI) has implemented stricter norms to stabilize the microfinance sector, resulting in short-term liquidity challenges for MFIs.Which of the statements given above is/are correct?a)1 Onlyb)1 and 3 Onlyc)1 and 2 Onlyd)1, 2 and 3Correct answer is option 'B'. 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 Consider the following statements regarding the current status of microfinance institutions (MFIs) in India:1. The gross non-performing assets (NPAs) in India's MFIs rose to 16% by March 2025, nearly doubling from 8.8% in 2024.2. The Joint Liability Group (JLG) model has become more effective due to increased borrower accountability.3. The Reserve Bank of India (RBI) has implemented stricter norms to stabilize the microfinance sector, resulting in short-term liquidity challenges for MFIs.Which of the statements given above is/are correct?a)1 Onlyb)1 and 3 Onlyc)1 and 2 Onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding the current status of microfinance institutions (MFIs) in India:1. The gross non-performing assets (NPAs) in India's MFIs rose to 16% by March 2025, nearly doubling from 8.8% in 2024.2. The Joint Liability Group (JLG) model has become more effective due to increased borrower accountability.3. The Reserve Bank of India (RBI) has implemented stricter norms to stabilize the microfinance sector, resulting in short-term liquidity challenges for MFIs.Which of the statements given above is/are correct?a)1 Onlyb)1 and 3 Onlyc)1 and 2 Onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer?.
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