The Role of Microfinance Schemes in Developing and Emerging Economies

The video explores microfinance schemes and their role in developing economies. It highlights the financial challenges faced by these economies, such as lack of infrastructure and reliance on unofficial markets. Microfinance schemes provide small loans to individuals, fostering enterprise and economic growth. The video emphasizes the empowerment of women and societal benefits, using the Grameen Bank in Bangladesh as a case study. The success of microfinance in improving living standards and reducing poverty is discussed.

What is the primary role of microfinance schemes in developing economies?

• To regulate unofficial financial markets

• To increase government tax revenue

• To offer small loans to individuals and families

• To provide large-scale infrastructure funding

Why do individuals in developing economies often rely on unofficial financial markets?

• Due to government incentives

• Because they are more trustworthy

• Due to lack of access to official credit markets

• Because they offer lower interest rates

How do microfinance schemes help reduce the brain drain from developing to developed economies?

• By increasing government subsidies

• By providing large-scale infrastructure projects

• By offering high-paying jobs

• By fostering local entrepreneurship

What is one significant impact of microfinance schemes on women in developing economies?

• They empower women with stable income streams

• They limit access to education

• They reduce women's participation in the workforce

• They increase reliance on agriculture

How do microfinance schemes benefit governments in developing economies?

• By increasing economic activity and tax revenue

• By decreasing public spending

• By reducing tax revenue

• By limiting foreign investments

What was a unique feature of the Grameen Bank's microfinance model?

• High collateral requirements

• High-interest rates

• Joint loan schemes without collateral

• Focus on urban areas

What was the repayment success rate of the Grameen Bank's loans?

• 75%

• 99.7%

• 85%

• 90%

Which sector do microfinance schemes help individuals move away from?

• Technology sector

• Agricultural sector

• Service sector

• Manufacturing sector

What was the primary reason for the establishment of the Grameen Bank?

• To promote international trade

• To increase government control over banks

• To address extreme poverty and lack of credit access

• To support large corporations

What economic model is mentioned in relation to the development progress in Bangladesh?

• Keynesian model

• Harrod-Domar model

• Solow growth model

• Ricardian model