3rd year - 1st sem > MICROFINANCE > Flashcards

MICROFINANCE Flashcards

(62 cards)

Study These Flashcards
1
Q

_______ is the provision of a broad range of financial services such as deposits, loans, payment services, money transfers and insurance products to the poor and low-income households and their microenterprises.

A

Microfinance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Examples are NGO transformation into a formal
financial institution, downscaling strategy of commercial banks, developing new financial legislation adapted to the circumstances of MFIs like NGOs and credit unions.

A

institutional arrangement innovations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

_______ is mainly focused on the economically active, entrepreneurial poor (e-poor).

A

Microfinance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

_____ pertain to the entrepreneurs who have a stable economic activity and are assessed to be able to sustain and enhance their business if they are provided with even a small amount of readily available funds.

A

E-poors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What are the core principles of microfinance?

A

1) that the poor need sustained access to financial services and products and this sustained access is a primary issue over interest rates,
2) that the poor have the capacity to repay their loans and to save and,
3) that microfinance institutions can be operationally and financially self-sufficient.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Finances can be attained through

A
  1. debt
  2. equity
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

______ is a liability on the part of the entrepreneur

A

debt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

______ is an investment upon which the investor becomes a partner to the entrepreneur.

A

equity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

_______ involves the borrowing of money and paying it back with interest.

A

Debt financing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

The most common form of debt financing is a______

A

loan

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Debt financing includes tapping your own sources of funds like using

A
  1. personal loans
  2. business loan
  3. housing loans and
  4. even credit cards.
  5. It may also be through family or friends
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are the advantages of Debt financing

A
  1. You have control and make all decisions
  2. The interest you pay is tax deductible. It shields part of your business income from taxes and lowers tax liability
  3. You own all the profit
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What are the disadvantages of Debt financing

A
  1. You need large loan payment
  2. Not paying your loan on time can ruin your credit rating.
  3. For new business, banks require you to pledge your personal assets
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

The main advantage of debt financing is having ___________

A

independence

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

_________ involves selling a portion of a company’s equity in return for capital

A

Equity financing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What are the advantages of Equity financing

A
  1. You can use your cash and that from your investor. You can start w/o burden of debt
  2. If investors understand that their money is at risk in your new startup, they know they won’t get it back if the business fails. You’re not obliged to return their investment, and your personal assets are safe.
  3. Investors may offer valuable business assistance
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are the disadvantages of Equity financing

A
  1. Investors own a piece of your business
  2. You are expected to act in your investors best interest, if there is negligence they file a lawsuit
  3. Investors expect a share of profits
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Microfinance ecosystem composes of:

A
  1. Institutions
  2. Instruments
  3. markets
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

The system consists of individuals:

A
  1. Savers
  2. Intermediaries
  3. Markets
  4. borrowers
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Economic institutions or economic units are mainly composed of:

A
  1. Households
  2. Business firms
  3. Governments
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

facilitate the transfer of funds from those institutions with surplus to those deficit

A

Intermediation process =

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

establishments that conduct financial transactions such as investment, loan, and deposits.

A

Financial institutions =

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

The formal sectors directly and indirectly providing microfinance services.

A

Ex: commercial banks, thrift banks, nonstock sabings and loan associations, rural banks, pawnshop.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

True or False: Credit Union and Savings and Credit cooperatives part of formal sector (outside of the BSP)

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Example of Informal sectors
1. Traders 2. Input-suppliers 3. Money lenders 4. ROSCA 5. ASCA
26
members regular monetary contributions
Rotating Savings and Credit Associations (paluwagan system)
27
________acquire a life by being kept and accumulated for a given period
Accumulating Savings and Credit Association
28
_____ is mandated under _________to conduct monetary policy that will maintain stability
1. BSP 2. ,RA 7653 (New Central Bank Act)
29
Philippine Deposit Insurance System (PDIC) deposit protection framework __________
1,000,000
30
_________ a service for poor people that are unemployed, entrepreneurs or farmers
Microcredit
31
____ percent of the poor in the Philippines are in rural areas, the challenge to microfinance is how to reach the rural, agriculture-based poor population.
70
32
Microfinance helps the poor:
1. Increase income and smooth consumption 2. Build assets and cope with economic shocks 3. Reduce vulnerabilities during crises
33
________ is the central strategy for poverty reduction in the Philippines under Republic Act 8425 (Social Reform and Poverty Alleviation Act) and is an important part of the Medium-Term Philippine Development Plan (MTDP) 2004-2010.
Microfinance
34
_____ is the first in Asia-Pacific to adopt microfinance in its central banking system.
Philippines
35
__________critical information to identify creditworthy borrowers
Credit Information and Systems Act(CISA Law)
36
CISA stand for
Credit Information and Systems Act
37
WHAT ARE THE TYPES OF INNOVATIONS IN OUTREACH
1. Strategic innovations 2. Institutional arrangement innovations 3. Donor incentive innovations
38
_______ refer to strategies followed by MFIs to develop their clientele. Examples are risk information systems
Strategic innovations
39
__________refer to changing legal status and the institutional arrangements to improve MFI performance.
Institutional arrangement innovations
40
_________refer to those mechanisms that are available to donors to improve the performance of MFIs. Examples are design features to improve the MFIs’ outreach and viability.
Donor incentive innovations
41
_______ is a financial performance monitoring system designed to offer management guidance for credit unions and other savings institutions.
PEARLS
42
_______ is also a supervisory tool for regulators.
PEARLS
43
Pearl stands
P- Protection, E- Effective financial structure, A –Asset quality, R- Rates of return and costs, L – Liquidity, S – Signs of growth.
44
According to the National Credit Council (NCC), ________ refers to the issuance of the necessary rules and regulation, including cancellation, suspension, [and] sanctions, governing the intermediation of microfinancial services.
“microfinance regulation
45
_____________ allowing microfinance-oriented banks to set up branches anywhere in the country, subject to meeting the criteria and standards set by BSP to ensure a loan portfolio quality.
Issuance of BSP Circular 505
46
____________entitled Consumer Protection for Electronic Banking, prescribing the rules and regulations for consumer protection. The expansion of e-banking, including the application of cellular phone technology to financial transactions, has lowered the cost of transfers and payments, and promoted savings mobilization
Issuance of Circular No. 542,
47
____________, which requires NGOs providing microfinance and related services to disclose this information to SEC. Within 30 days of its issuance, NGOs were required to file a revised general information sheet (GIS) and, if necessary, amend articles of incorporation. GISs and annual financial statements of microfinance operating NGOs are downloadable from the SEC data system.
Issuance of SEC Memorandum Circular No. 2 on 18 January 2006
48
___________defines microfinance as “small loans granted to the basic sectors, as defined in the Social Poverty and Reform Act (RA 8425) of 1997, and other loans granted to the poor and low- income households for their microenterprises and small businesses so as to enable them to raise their income levels and improve their living standards.”
BSP Circular No. 272 which was issued on 30 January 2001,
49
_______ respond to liquidity crunches, mostly consumption needs, in a speedy and secure manner (through gold as collateral). Transactions are usually of small sizes and loans are approved based on value of gold, not on character of borrower eliminating the need for costly background checks.
Pawn loans
50
The ____________, on the other hand, are meant for business expansion or for business peak season needs. Clients with good track records are qualified for these loans, a way to reward them and to set out signals to other borrowers as well.
preferential client loans
51
________ is a type of product-market arrangement where a processor or buyer provides inputs on credit linked to a purchase agreement and repayment of initial input is deducted when the farmer sells the produce
Contract farming
52
_____ where traders use personal contacts and existing trading relationships as a substitute for collateral and to reduce risk of side-selling.
trader credit
53
the ____ is an integrated form of contract farming where the agribusiness has greater control over smallholder production while the smallholder producer basically offers land and labor in return for a package of inputs and extension services
outgrower scheme
54
linking credit to agricultural produce is __________
warehouse receipt financing.
55
____________ provides for tax (e.g. income tax exemptions from enterprise operations), as well as other forms of incentives (e.g. one-stop business registration centers, special credit windows) to BMBEs, such as simplified registration with the local government units.
Barangay Micro Business Enterprises Act in 2002
56
The extent to which microfinance services reach low-income and excluded populations.
OUTREACH
57
The four attributes of outreach:
Breadth – number of clients served Depth – extent to which the poor are served Scope – range of products offered Sustainability – permanence of service provision
58
Poverty is mostly rural, but outreach is limited due to _______, ______, and ________.
1. poor infrastructure 2. high costs 3. cultural barriers
59
The ease and availability of financial services to those who need them most.
ACCESS
60
The economic and social changes resulting from access to microfinance.
IMPACT
61
Provides low-cost, low-coverage protection for low-income people/businesses excluded from formal insurance. Helps manage risks and ensures repayment capacity during emergencies.
microinsurance
62
The development and improvement of microfinance services over time.
PROGRESS
3rd year - 1st sem
flashcards
Decks in class (15)
# Cards
Brainscape helps you reach your goals faster, through stronger study habits.
© 2026 Bold Learning Solutions. Terms and Conditions