Directions for questions 31 to 34: The passage given below is followed by a set of four questions. Choose the most appropriate answer to each question. Microfinance in India started in the early 1980s with small efforts at forming informal self-help groups (SHG) to provide access to much-needed savings and credit services. From this small beginning, the microfinance sector has grown significantly in the past decades. National bodies like the Small Industries Development Bank of India (SIDBI) and the National Bank for Agriculture and Rural Development (NABARD) are devoting significant time and financial resources to microfinance. The strength of the microfinance organizations (MFOs) in India is in the diversity of approaches and forms that have evolved over time. In addition to the home-grown models of SHGs and mutually aided cooperative societies (MACS), the country has learned from other microfinance experiments across the world, particularly those in Bangladesh, Indonesia, Thailand, and Bolivia, in terms of delivery of microfinancial services. Indian organizations could also learn from the transformation experiences of these microfinance initiatives. Robinson (2001) defines microfinance as "small-scale financial services—primarily credit and savings— provided to people who farm, fish or herd" and adds that it "refers to all types of financial services provided to low-income households and enterprises." In India, microfinance is generally understood but not clearly defined. For instance, if a SHG (Self-Help Group) gives a loan for an economic activity, it is seen as microfinance. But if a commercial bank gives a similar loan, it is unlikely that it would be treated as microfinance. In India, microfinance is done by organizations having diverse orientations. NGOs in India perform a range of developmental activities; microfinance usually is a sub-component. Some of these NGOs organize groups and link them to an existing provider of financial services. In some cases NGOs have a "revolving fund" that is used for lending. But in either of these cases, microfinance is not a core activity for these NGOs. An example is the Aga Khan Rural Support Programme India (AKRSP-I). For AKRSP-I, the microfinance component is incidental to its work in natural resource management. Examples like MYRADA and the Self-Employed Women's Association (SEWA) fall in the same category. However, as their microfinance portfolios grew, both organizations decided to form separate entities for microfinance. MYRADA set up an MFO called Sanghamitra Rural Financial Services (SRFS), while SEWA set up the SEWA Cooperative Bank. At the next level, we find NGOs helping the poor in economic activities. Their purpose is developmental. They see microfinance as an activity that feeds into economic activities. For instance, the South Indian Federation of Fishermen's Societies (SIFFS) started as a support organization for fishermen, providing technical and marketing support. It then arranged for loans to its members through banks. When the arrangement was not effective, it started providing loans itself. At the third level, we have organizations with microfinance at the core. They have developmental roots, but are diverse in their operational details, orientation, and form of incorporation.
31. The style used by the author in this passage is
(a) descriptive (b) instructional (c) critical (d) analytical
32. Which one of the following is the strength of the microfinance organizations in India? (a) In India, microfinance is provided by NGOs that help the poor in economic activities. (b) In India, microfinance is done by organizations having diverse orientations. (c) In India, diverse approaches have been used and there is learning from other microfinance experiments across the world. (d) In India, microfinance is generally understood but not clearly defined
. 33. "If an SHG gives a loan for an economic activity, it is seen as microfinance. But if a commercial bank gives a similar loan, it is unlikely that it would be treated as microfinance." Which of the following options would help understand the above statement? (a) In India, microfinance is defined by 'who gives the loan' and not by 'why it is given'. (b) In India, microfinance is defined by 'why the loan is given' and not by 'who gives the loan'. (c) Microfinance is generally understood but not clearly defined. (d) None of the above
34. According to the passage, the South Indian Federation of Fishermen's Societies (SIFFS) independent microfinance activity provides (a) support to farmers when loan arrangements through banks were not effective. (b) support to fishermen when loan arrangements through banks were not effective. (c) supplementary support to the banks that were unable to effect loan arrangements. (d) support to organizations with microfinance at the core.
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