Once a Loan Has Been Approved by a Conventional Microfinance

question 79

Multiple Choice

Once a loan has been approved by a conventional microfinance institution then:

• A) a part of the principal is deducted by the institution for different funds such as group and emergency funds
• B) the beneficiary pays interest on the total amount approved
• C) the beneficiary may divert the funds to non-productive means
• D) all of the above

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Definitions:

Variable Costs

Variable costs are expenses that change in proportion to the activity of a business, such as sales volume or production levels.

Operating Income

The profit realized from a business's core operational activities, excluding deductions of interest and tax.

Unit Selling Price

The amount of money charged for each individual unit of a product or service.

Contribution Margin Ratio

A financial ratio that measures the profitability of a product by subtracting variable costs from sales and dividing the result by total sales.