THE INSTITUTE OF FINANCE MANAGEMENT

DEPARTMENT OF BANKING AND FINANCIAL SERVICES

BBF III - 2018/19
TUTORIAL QUESTIONS
BFU 08605: MICROFINANCE
10TH APRIL, 2019
1. The primary objective of microfinance service is to alleviate poverty in the community.
However, most of the participants in microfinance services are women. With relevant
examples, discuss the reasons for such practice.
2. Discuss the way micro-credit services assist the poor, low-income individuals and micro-
enterprises?

3. Why recent years have experienced a rapid growth of microfinance industry in Tanzania
and other parts of the world?

4. How is poverty defined and categorized in Tanzania? How far down the income scale do
formal financial services reach?

5. Discuss briefly some of the key issues of the first and second generation of the financial
sector reforms in Tanzania.

6. Some MFIs provide financial services and non-financial services. What kind of financial
services are provided? Discuss the reasons for MFIs to provide non-financial services.

7. On 1st December, 2018, Mr. Hellod was granted a loan that worth 98,670,000
Bangladesh Taka (BDT) by Grameen bank, repayable in 4 years on equal half yearly
installments. According to Grameen Bank, the interest is computed based on the reducing
balance method. The bank charged an interest rate of 20% p.a. and Mr. Hellod accepted.
Required;
i. Discuss briefly the common methods for computing interest
ii. Based on the loan details above advice the customer whether the method is
favorable or not? Advice other possible method with its usefulness or limitations.
8. Discuss the limitations of the National Microfinance Policy (NMP) 2000 and the way
each limitation is addressed in the current NMP 2017.
9. a) What do you understand by the concepts outreach and sustainability as used in
microfinance?

b) Discuss how different sources of fund may affect MFIs approaches and mission to
serve the poor and low-income people.

10. The population census of 2012 indicates about 70.9% (NBS, 2013) of Tanzanians live in
the rural areas where most of them engage in agricultural activities. However, the sector
has not been performing very well. Provide brief background of the agricultural sector,
discuss its importance, its limitations and the way microfinance can be useful in
improving agricultural production in the country.

11. One of the BBF students was amazed to figure out that there is a course for microfinance
in addition to other banking courses during her third year studies. His worry was why
issues about conventional banking and microfinance taught in the same class while they
are identical. What are your views?

The only place where poverty should be is in museums –Prof Yunus M