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Bsmf 111: Micro Finance Development Perspectives Question Paper

Bsmf 111: Micro Finance Development Perspectives 

Course:Business Administration

Institution: Kenya Methodist University question papers

Exam Year:2010



FACULTY : BUSINESS AND MANAGEMENT STUDIES
DEPARTMENT : BUSINESS ADMINISTRATION
TIME : 2 HOURS

INSTRUCTIONS Answer Question ONE (compulsory) and any other TWO Questions

Sweet Waters Sacco has hired you as a Microfinance specialist to head their newly started microfinance department. Previously Sweet Waters provided credit only to casual workers working in the flower farms in Naivasha but are now looking at extending credit to traders in the same locality. You are required to prepare for a presentation to be made to the Board Members. To facilitate the presentation you are expected to do the following.

Question 1
a) Define Microfinance (6marks)
b) Explain why microfinance is growing (12marks)
c) Discuss the risks associated with Microfinanace (12marks)

Question 2
a) Discuss major approaches used in providing microfinance services by Microfinance Institutions (MFIs) (10marks)
b) Differentiate between the major approaches (10marks)

Question 3
The poor people face various challenges in trying to address their day to day needs. The main challenge facing them is lack of appropriate financial tools to address their needs.
a) Explain the various categories in the financial systems (6mks)
b) Discuss the different tool in which the poor save and access credit (10mks)
c) Outline the methodology that the poor use in mobilizing savings (4marks)

Question 4
Masaku youth group has approaches your consultancy firm to advise them on how to start a microfinance. Discuss how microfinance institutions are started (20marks)






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