Poverty and Microfinance (Group 3 Reporting)

Question 1

Projects to Reduce Poverty (1996)

Answer 1

1.Land Reclamation
2. Education
3. Integrating the poor in the market economy

Question 2

Land Reclamation Project

Answer 2

• Integrated Swamps Development Project in Indonesia
  (1994), to increase amount of land available to the poor.

Question 3

Education Project

Answer 3

• The Basic Education in Poor and Minority Areas Project
  (1995), to improve primary and lower- secondary education
  in schools in poor communities.

Question 4

Integrating the Poor in the Market Economy Project

Answer 4

• The Tanzania Second Integrated Roads Project (1994), to
  rehabilitate and improve rural roads and bridges, and rural transport infrastructure.

Question 5

Some development agencies believed that in order to break the cycle of poverty, the poor should be given _______, in terms of production and human capital (World Bank, 1996).

Answer 5

Assets

Question 6

Others believed that the poor already have _______ and just require small amount of capital to
operate a viable enterprise (Holcombre, 1995).

Answer 6

Skills

Question 7

These factors encouraged development organizations like Grameen Bank to start programs like “leading the poor”. Over time
the demand for financial services evolved. Credit service was coupled with savings and insurance, and many other innovative financial products. This is where the idea of microfinance came about, the ___________________, credit, savings,
insurance, etc., to marginalized sector.

Answer 7

Provision of Financial Services

Question 8

Sustainable means _____________.

Answer 8

Continuous

Question 9

An MFI is said to be sustainable if __________________________________.

Answer 9

It is able to balance its mission of serving the poor and at the same time generating surplus.

Question 10

_______ (1998) identified four main areas on how Microfinance can assist the poor.

Answer 10

Gulli

Question 11

The Four Main Areas on How Microfinance can Assist the Poor
(FPPB)

Answer 11

1. Facilitates the activities to earn livelihood
2. Promote investment in assets
3. Protect against income shocks
4. Build social capital and improve quality of life

Question 12

The coping mechanism of the poor, they need access to financial
services to be able to sustain their enterprise activities efficiently.

(Four Main Areas)

Answer 12

Facilitates the activities to earn livelihood

Question 13

Provide additional “purchasing power” and enable micro entrepreneurs to purchase small assets like equipment to
improve production.

(Four Main Area)

Answer 13

Promote investment in assets

Question 14

Provides micro entrepreneurs the means to save and cope with
emergencies and life events like weddings and funeral.

(Four Main Area)

Answer 14

Protect against income shocks

Question 15

Allows the poor to participate in social activities and sometimes local political activities.

(Four Main Area)

Answer 15

Build social capital and improve quality of life

Question 16

Apart from the factors above, Grameen Bank believes that empowering people through a.________________ and b._______________, c._______________, and d.______________________ will increase their productivity even more. This is why microfinance institutions do not only offer financial products, but non-financial services as well, that will develop both the productive and social capabilities of the poor.

Answer 16

a. continuous training
b. raising consciousness
c. increasing their awareness
d. developing their leadership capabilities

Question 17

As a loan officer it is important for you ______________________________, and ______________________________.

Answer 17

a. to understand this link between poverty situation and microfinance
b. appreciate the significance of the products and services you deliver to the poor