Directions (1-10): Read the following passage carefully and
answer the following questions given below it.
answer the following questions given below it.
Today, with a Noble prize to its credit, Grameen is one of
the largest microfinance organisations in the world. It started out lending
small sums to poor entrepreneurs in Bangladesh to help them grow from a
subsistence living to a livelihood. The great discovery its founders made was
that even with few assets, these entrepreneurs repaid on time. Grameen and
microfinance have since become financial staples of the developing world.
Grameen’s approach, unlike other microfinancers, uses the group-lending model.
Costs are kept down by having borrowers vet one another, typing together their
financial fates and eliminating expensive loan officers entirely. The ultimate
promise of Grameen is to use business lending as a way for people to lift
themselves out of poverty.
the largest microfinance organisations in the world. It started out lending
small sums to poor entrepreneurs in Bangladesh to help them grow from a
subsistence living to a livelihood. The great discovery its founders made was
that even with few assets, these entrepreneurs repaid on time. Grameen and
microfinance have since become financial staples of the developing world.
Grameen’s approach, unlike other microfinancers, uses the group-lending model.
Costs are kept down by having borrowers vet one another, typing together their
financial fates and eliminating expensive loan officers entirely. The ultimate
promise of Grameen is to use business lending as a way for people to lift
themselves out of poverty.
Recently Grameen has
taken on a different challenge – by setting up operations in the US. Money may
be tight in the waning recession, but it is still a nation of 1,00,000 bank
branches. Globally, the working microfinance equation consists of borrowing
funds cheaply and keeping loan defaults and overhead expenses sufficiently low.
Microlenders, including Grameen, do this by charging colossal interest rates –
as high as 60% or 70% – Which is necessary to compensate for the risk and
attract bank funding. But loans at rates much above the standard 15% would most
likely be attacked as usurious in America.
taken on a different challenge – by setting up operations in the US. Money may
be tight in the waning recession, but it is still a nation of 1,00,000 bank
branches. Globally, the working microfinance equation consists of borrowing
funds cheaply and keeping loan defaults and overhead expenses sufficiently low.
Microlenders, including Grameen, do this by charging colossal interest rates –
as high as 60% or 70% – Which is necessary to compensate for the risk and
attract bank funding. But loans at rates much above the standard 15% would most
likely be attacked as usurious in America.
So, the question is whether there is a role for a Third
World lender in the world’s largest economy. Grameen America believes that in a
few years it will be successful and turn a profit, thanks to 9 million US
households untouched by mainstream banks and 21 million using the likes of
payday loans and pawn ships for financing. But enticing the unbanked won’t be
easy. After all, profit has long eluded US microfinanciers and if it is not
lucrative, it is not microlending, but charity. When Grameen first went to the
US, in the late 1980s, it tripped up. Under Grameen’s tutelage, banks started
micro loans to entrepreneurs with a shocking 30% loss. But Grameen America says
that this time results will be different because Grameen employees themselves
will be making the loans, not training an American bank to do it. More often
than not, the borrowers, Grameen finds, in the US already have jobs (as
factory workers for example) or side
businesses – selling toys, cleaning houses etc. The loans from Grameen, by and
large, provide s steadier source of funding, but they don’t create businesses
out of nothing. But money isn’t everything. More importantly for many
entrepreneurs, group members are tremendous sources of support to one another.
So even if studies are yet to determine if Grameen is a clear-cut pathway out
of poverty, it still achieves something useful.
World lender in the world’s largest economy. Grameen America believes that in a
few years it will be successful and turn a profit, thanks to 9 million US
households untouched by mainstream banks and 21 million using the likes of
payday loans and pawn ships for financing. But enticing the unbanked won’t be
easy. After all, profit has long eluded US microfinanciers and if it is not
lucrative, it is not microlending, but charity. When Grameen first went to the
US, in the late 1980s, it tripped up. Under Grameen’s tutelage, banks started
micro loans to entrepreneurs with a shocking 30% loss. But Grameen America says
that this time results will be different because Grameen employees themselves
will be making the loans, not training an American bank to do it. More often
than not, the borrowers, Grameen finds, in the US already have jobs (as
factory workers for example) or side
businesses – selling toys, cleaning houses etc. The loans from Grameen, by and
large, provide s steadier source of funding, but they don’t create businesses
out of nothing. But money isn’t everything. More importantly for many
entrepreneurs, group members are tremendous sources of support to one another.
So even if studies are yet to determine if Grameen is a clear-cut pathway out
of poverty, it still achieves something useful.
Q1. What has adversely affected the success of microfinance
institutions in the US?
institutions in the US?
(a) The focus of these institutions is on making a profit at
any cost instead of being charitable to the needy.
any cost instead of being charitable to the needy.
(b) American banks engaged in microlending were the most
severely hit during the recession.
severely hit during the recession.
(c) A widespread perception among bankers that these
institutions are better suited to developing countries.
institutions are better suited to developing countries.
(d) Their failure to attract those outside the formal
banking system as customers
banking system as customers
(e) Americans are too proud to accept aid from Third World
countries.
countries.
Q2. Why has Grameen made a second attempt to launch itself
in the US?
in the US?
(a) The willingness of US banks to provide the necessary
staff and funds to facilitate the spread of microfinance
staff and funds to facilitate the spread of microfinance
(b) The rates of interest on loans in the US are exorbitant,
making it easier to recover capital.
making it easier to recover capital.
(c) The realization that a large percentage of the American
population not reached by mainstream banks can be trapped
population not reached by mainstream banks can be trapped
(d) Recognition of the fact that disbursing credit in
developing countries during the recession is too risky.
developing countries during the recession is too risky.
(e) None of these
Q3. Which of the following can be inferred from the passage?
(a) Microfinance has been successful only in Asian
countries.
countries.
(b) Microfinance makes individual borrowers dependent rather
than independent.
than independent.
(c) America has the largest number of banks in the world.
(d) There is scope for microfinance institutions to be
profitable in developed countries.
profitable in developed countries.
(e) There are no informal sources of credit in developed
countries.
countries.
Q4. According to the author, what has enhanced the
likelihood of success for Grameen America at present?
likelihood of success for Grameen America at present?
(a) Its success in Bangladesh and other developing
countires.
countires.
(b) Absence of other microfinance institutions for
competition.
competition.
(c) The fact that America is currently in the midst of a
recession.
recession.
(d) It provides loans at nominal rates of interest, ie below
15 per cent.
15 per cent.
(e) None of these
Q5. Which of the following can be said about Grameen?
(A)Its success in developing countries will ensure its
success in developed countries.
success in developed countries.
(B)It ensures that the poor in developing countries enjoy a
subsistence standard of living.
subsistence standard of living.
(C)It has demonstrated that the poor are far more likely to
repay loans that the affluent.
repay loans that the affluent.
(a) None
(b) Only A
(c) Only A and C
(d) Only B
(e) Only C
Q6. What is the central theme of the passage?
(a) The contention that Grameen is doomed to fail in
developed countries.
developed countries.
(b) A comprehensive evaluation of the current status of the
American economy.
American economy.
(c) A discussion about the prospects of Grameen and
microfinance in the US.
microfinance in the US.
(d) The role of banks in facilitating microlending efforts
in developed nations.
in developed nations.
(e) Microfinance efforts are useful in developing countries
but are futile in developed ones.
but are futile in developed ones.
Q7. Why was Grameen America’s initial US initiative a flop?
(A) Lack of proper training to Grameen America personnel.
(B) Grameen’s refusal to adapt their system to meet the
needs of the American poor.
needs of the American poor.
(C) It ended up giving loans at half their customary rates
of interest.
of interest.
(a) None
(b) Only A
(c) Only A and C
(d) Only B
(e) Only C
Q8. Which of the following is a benefit of the Grameen
system of microfinance?
system of microfinance?
(a) If a single member is unable to rapay a loan, other
group members will repay it.
group members will repay it.
(b) Dispensing with the expense of technology networks to
monitor advances.
monitor advances.
(c) It utilizes the vast bank network already existing in a
country.
country.
(d) Group members can sanction loans and verify if borrowers
have sufficient collateral.
have sufficient collateral.
(e) Backing that borrows receive from other group members.
Q9. Which of the following is most similar in meaning to the
word “ELUDED” as used in the passage?
word “ELUDED” as used in the passage?
(a) Avoided
(b) Duped
(c) Abandoned
(d) Intangible
(e) Betrayed
Q10. Which of the following is most opposite in meaning to
the word “COLOSSAL” as used in the passage?
the word “COLOSSAL” as used in the passage?
(a) Short
(b) Lavish
(c) Minority
(d) Frugal
(e) Insignificant
Directions (11-15):
Choose the option which is the antonym of the word mentioned in the question.
Choose the option which is the antonym of the word mentioned in the question.
Q11. Ally
(a) adversary
(b) partner
(c) fence-sitter
(d) almighty
(e) relax
Q12. Oblivious
(a) apparent
(b) unperturbed
(c) nonchalant
(d) alert
(e) absent-minded
Q13. Affirmative
(a) obliging
(b) uncivilized
(c) platonic
(d) negative
(e) approving
Q14. Ambiguous
(a) unequivocal
(b) perplexing
(c) befuddled
(d) murky
(e) uncertain
Q15. Abhorrence
(a) disgust
(b) admiration
(c) animus
(d) pathos
(e) loathsome
