BBM 8th Semester
Micro finance Board Question Paper 2022

What is microfinance?

Define micro pension.

What do mean by group guarantee?

Enlist any five functional microfinance risks.

What do you mean by securitization?

Give the meaning of financial inclusion.

Differentiate between financial intermediation and social intermediation.

Why does the community banking model of microfinance have sense of popularity?

Briefly describe the microfinance regulatory authority and institutions in Nepal.

Give a brief account of Rural Self Reliance Fund (RSRF).

What are the key external risks that microfinance institutions (MFIs) face?

Describe the microfinance initiatives related to financial inclusion.

Give a brief account of cooperative model of microfinance. Why saving and credit cooperatives (SCCs) are considered to be more suitable models for mountains and hills of Nepal? Explain.

What does Community-Based Organizations (CBOs)/Self Help Groups (SHGs) mean? Differentiate between SHGs and Joint Liability Group model (JLGs) of microfinance.

Explain the functional risks of MFIs. Why functional risks of MFIs are becoming more significant than other risks in recent period?

What are the major Nepali MFI's microfinance related programs? Explain one of them in detail.

Read the following cases carefully and answer the questions that follow:

Among 9 members of Pragati beekeeping group, which was formed by Gaidakot Beekeeping Cooperative (GBC), Ms. Purnima Saru was doing beekeeping activities at subsistence level. She got entrepreneurship and skills development trainings from GBC with the technical support from RMDC MFFI, and became more interested to expand her honey production to generate some income. RMDC facilitated her to develop a simple business plan to expand her honey production. As she was interested to start a micro-enterprise on beekeeping, the group meeting of Pragati held on May 20, 2018 decided to recommend GBC to support her with a credit of Rs 100,000. With the recommendation letter from GBC official, she applied to Agricultural Development Bank (ADBN) Gaidakot branch for a credit of Rs 100,000 with the required documents (business plan, GBC recommendation letter, group recommendation and group guarantee letter, and a copy of citizenship) on May 28, 2018. Her business plan stipulated a yearly production of 210 kg of honey and sales amount of Rs 84,000. From the operations, it was estimated that she could make a monthly net profit of Rs 7,144 after deducting the expenses in raw materials, labor (own and family members time), bank interests, and depreciation

ADBN decided to provide her a credit of Rs 100,000 at 15% interest rate per annum (including all service charge) with the provision of repayment in two equal installments by December 2018 and July 2019. ADBN provided her the entire amount on June 9, 2018. With the credit support, she purchased required equipments and materials (15 bee hives with queen gates and stands, safety cap, gloves, knives, bee colonies, sugar, etc.) for beekeeping. With the incomes from the micro-enterprise, she repaid the entire credit by November 2019 and has been supporting her family livelihoods. With the micro-credit support from ADBN and technical assistance from GBC and RMDC staff, she was able to successfully run the beekeeping operations and make good incomes out of it.

Questions:
a. What are the main features of Purnima's business plan?
b. Describe what documents are required to get loan from ADBN.
c. Does Purnima require collateral to obtain credit from ADBN?
d. How Purnima Saru become a successful entrepreneur in operating beekeeping business?