Kiva Fellows Program Pre-training Microfinance Course

38 Questions | Total Attempts: 143

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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


Questions and Answers
  • 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

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