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Mifi 430 :Microfinance Policy &Amp; Regulation Question Paper

Mifi 430 :Microfinance Policy &Amp; Regulation

Course:Business Administration

Institution: Kenya Methodist University question papers

Exam Year:2014

KENYA METHODIST UNIVERSITY

END OF 3''RD ''TRIMESTER 2014 (PT) EXAMINATION
SCHOOL : BUSINESS AND ECONOMICS
DEPARTMENT : ACCOUNTING, FINANCE & INVESTMENT
UNIT CODE : MIFI 430
UNIT TITLE : MICROFINANCE POLICY & REGULATION

TIME: 2 HOURS

INSTRUCTIONS

Answer Question One and any other Two Questions

Question One

Government subsidized credit is usually not a good idea for developing countries like Kenya. Why?

(5 Mks)

Micro-credit programs, often subsidized have in some cases helped the poor families to improve their economic situations. Why might subsidized credit be useful in these programmes but also have its limitations.

(10 Mks)

What are the major reasons why governments intervenes to regulate microfinance institutions?

(5 Mks)

What is a micro-credit (microfinance) programme and how does poverty – based micro-finance, such as the Kenya Women Finance Trust differ from more commercially-oriented micro finance programme.

(10 Mks)

Question Two

"Micro finance is rapidly shifting from a niche product to a globally recognized form of finance yet as micro finance offerings become more sophisticated and diverse, regulatory and market gaps keep the industry from operating as well as it should." Discuss this statement giving examples.

(15 Mks)

Explain why commercial MFIs are subjected to increased demand for profits as opposed to helping the poor.

(5 Mks)

Question Three

Explain why there can be risk management failure in MFIs as systems and controls become over stretched.

(10 Mks)

Discuss why there could be insolvency concerns with rapid expansion of MFIs in Kenya, especially non-regulated MFIs.

(10 Mks)

Question Four

Explain how client over-indebtedness through multiple loans as competition for market share intensifies can be overcome.

(10 Mks)

Explain how cross-border financing of MFIs can be regularized. Explain how government can regulate a rural finance and micro finance institution.

(10 Mks)

Question Five

Differentiate between a commercial bank and a micro finance institution.

(10 Mks)

Outline the advantages and disadvantages of regulating micro finance institutions in Kenya.

(10 Mks)

Mifi 430 :Microfinance Policy &Amp; Regulation Question Paper

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