INSTRUCTIONS ANSWER ALL QUESTIONS

Question One:

(a) Define microfinance and explain its primary objectives in the context of economic development. (12 Marks)

(b) Discuss the concept of financial inclusion and its significance in the context of microfinance. (13 Marks)

Question Two:

(a) Compare and contrast the Grameen model and the Village Banking model of microfinance. What are their strengths and weaknesses? (12 Marks)

(b) Explain how the Self-Help Group (SHG) model operates and its impact on rural development. (13 Marks)

Question Three:

a) Discuss the difference between microcredit and microsavings programs. Provide examples of each. (12 Marks)

b) Discuss the challenges faced by microfinance institutions (MFIs) in sustainability and profitability. How can these challenges be addressed? (13 Marks)

Question Four:

a) Describe the importance of effective regulation and supervision in the microfinance sector. What are the potential risks of inadequate regulation? (12 Marks)

b) Explain the concept of interest rate caps in microfinance and the debate surrounding their effectiveness and impact on MFIs and clients. (13 Marks)