Question
Consider the following Statements. i- Micro
Finance Institutions (MFls) obtain finance from banks, investors, deposits, etc. ii- MFIs provide small scale credit to low-income households and small informal businesses. iii- MFIs are regulated by NABARD.Solution
The Reserve Bank of India (RBI) shall regulate the micro finance sector; it may set an upper limit on the lending rate and margins of Micro Finance Institutions (MFIs). ii-MFIs provide small scale credit to low-income households and small informal businesses. In general, MFIs can borrow from big banks and investors or issue bonds; take deposits (savings) from clients; and accept equity investments, which are ownership stakes that earn a share of the profits.
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