CHAPTER 3 MICROFINANCE

Microfinance was first introduced by Prof. Dr. Muhammad Yunus in Bangladesh in 1983 through Grameen Bank.

• TRUE

• FALSE

Conventional microfinance primarily uses Shariah-compliant instruments like murabahah and qard al-hasan.

• TRUE

• FALSE

Islamic microfinance targets both poor and moderately poor populations, whereas conventional microfinance focuses only on moderately poor populations.

• TRUE

• FALSE

Islamic microfinance emphasizes risk-sharing and operates without riba (interest) or gharar (excessive uncertainty).

• TRUE

• FALSE

Growth-oriented microenterprises primarily aim to supplement family income through part-time or seasonal operations.

• TRUE

• FALSE

Takaful-tawuni is a form of Islamic mutual guarantee used in micro-insurance.

• TRUE

• FALSE

Which of the following is the primary focus of microfinance?

• Providing financial services to large-scale enterprises

• Offering small-scale financing to low-income individuals

• Facilitating international trade financing

• Supporting government projects

What is one key difference between Islamic microfinance and conventional microfinance?

• Conventional microfinance targets women exclusively.

• Islamic microfinance allows riba-based financing.

• Islamic microfinance uses group pressure for default management.

• Islamic microfinance incorporates Shariah principles and avoids interest.

Which of the following is a key characteristic of livelihood enterprises?

• Focus on niche markets with specialization opportunities.

• Generates significant surplus earnings for reinvestment.

• Operates part-time or seasonally to supplement family income.

• Employs specialized labor through vocational training.

In the Grameen Bank model of microfinance, loans are given based on _________.

• Individual collateral

• Joint liability and group approval

• Credit history

• Government guarantees