Kiva Fellows Program Pre-training Microfinance Course
This quiz is to measure KFP Trainees' understanding of the information provided in the UNCDF Microfinance Distance Learning Training Course
- 1.Why is microfinance not a useful tool for the extremely poor or destitute?
- A.
People without bank accounts have too much difficulty in safely managing the funds from a loan
- B.
A loan is only a valuable tool for those who have the capacity to repay it
- C.
The extremely poor lack the collateral necessary to qualify for a loan
- 2.Which of the following would NOT be a good candidate for credit?
- A.
A wheat farmer who sells his surplus crops at the market
- B.
A person who works for an hourly wage on a farm
- C.
A person who would like to buy her neighbor's land in order to increase her crops and sell them to her community
- 3.True or False: Financial Viability is a sufficient condition for accessing commercial capital.
- A.
True
- B.
False
- 4.How are financial intermediaries beneficial to both borrowers and savers?
- A.
They increase the costs for both
- B.
They increase marketing opportunities for both
- C.
They decrease the costs for both
- 5.How can savings help borrowers to manage risks?
- A.
It provides a safety net to cover costs in emergency situations
- B.
It pays interest, increasing the borrower's income
- C.
It can decrease the funds the borrower has available for investment
- 6.What are ROSCAs?
- A.
Renewable Outsourcing for Savings and Credit Associations
- B.
Rotating Savings and Credit Associations
- C.
Rotating Sustainability Counting Applications
- 7.Which of the following is a common reason for forced savings?
- A.
Providing a safe place to store money
- B.
Teaching people how to save
- C.
Creating collateral for a Loan
- 8.Which of the following is NOT considered an effective aspect of MFI operating methodologies?
- A.
Adhering to basic microlending principals
- B.
Adapting to fit the customers' preferences
- C.
Exchanging customer information with other MFIs in the area
- D.
Being suited to the capabilities of the institution managing the products and services
- 9.True or False: For the borrower, accessing financial services has no other costs than the interest rate on the loan
- A.
True
- B.
False
- 10.Which of the following measures is NOT useful in limiting the risk of default to an organization and overcoming credit market information problems?
- A.
Informal collateral with great intangible value to the borrower
- B.
Peer pressure in solidarity groups or the local community
- C.
Forced savings deposits
- D.
Higher interest rates
- 11.Deep financial policies can result in which of the following:
- A.
The imposition of restrictions on financial intermediaries
- B.
The creation of negative real interest rates, wherein inflation outpaces nominal interest rates
- C.
Undermined financial intermediation
- D.
Sustained growth of financial assets in comparison to growth in national income
- 12.An MFI risks experiencing a "run on the institution" when which of the following events occurs:
- A.
A rise in the level of national inflation
- B.
An increase in the number of borrowers
- C.
A significant repayment problem
- D.
A positive assessment by a microfinance lending agency
- 13.Which of the following is NOT characteristic of prudential regulation?
- A.
Informal guidelines
- B.
Detailed standards
- C.
Enforcement mechanisms
- D.
A highly capable, wide-ranging central financial authority
- 14.True or false: Interest rate caps increase vulnerable populations' access to credit.
- A.
True
- B.
False
- 15.What is an MFI's largest income-generating activity?
- A.
Its building investments
- B.
Its loan portfolio
- C.
Its community development programs
- D.
Its loan officer training
- 16.Effective disclosure on financial statements should include:
- A.
Loan portfolio quality
- B.
Methods used to report aging of loans and write-offs for bad debt
- C.
Subsidies (cash, in-kind, or soft loans)
- D.
All of the above
- 17.In microfinance, what does the term leverage refer to? Is it always good for an MFI to be highly leveraged?
- A.
An MFI's ratio of debt to equity; no
- B.
An MFI's ratio of debt to equity; yes
- C.
An MFI's ratio of retained earnings to share capital; yes
- D.
An MFI's ratio of retained earnings to share capital; no
- 18.True or false: Assets + Liabilities = Equity
- A.
True
- B.
False
- 19.True or False: Delinquent loans should be written off as soon as possible.
- A.
True
- B.
False
- 20.True or False: Historic repayment rates are NOT an accurate measure of portfolio quality
- A.
True
- B.
False
- 21.What is a restructured loan?
- A.
A loan for which the terms change after a given period of time
- B.
A loan for which the payment terms and interest rate have been renegotiated
- C.
A loan with a variable interest rate
- D.
All of the above
- 22.What does PAR stand for?
- A.
Portfolio arrears rating
- B.
Partner and ratings
- C.
Portfolio at risk
- 23.How does an MFI's loan portfolio size increase?
- A.
Repayments are made on existing loans
- B.
Delinquent loans are written-off
- C.
New loans are disbursed
- D.
None of the above
- 24.Which of the following factors is within the control of an MFI's strategic plan?
- A.
Client debt capacity
- B.
Market conditions
- C.
Strategic cost control implementation
- D.
All of the above
- 25.An MFI's successful planning process requires all of the following EXCEPT:
- A.
Participation of staff from all areas of operations
- B.
Several years' worth of performance data
- C.
Making assumptions based on individual experiences
- D.
Identification of key variables behind financial performance
Questions: 20 | Attempts: 940 | Last updated: Mar 21, 2022
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