Microfinance Institutions Get Around the Problem of Moral Hazard and High

question 48

Multiple Choice

Microfinance institutions get around the problem of moral hazard and high default rates by:

• A)lending to groups rather than individuals.
• B)lending only to proven borrowers.
• C)lending only to large businesses.
• D)charging usurious interest rates.

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Definitions:

Legislative Requirements

Obligations or conditions laid down by law that must be complied with by individuals or organizations.

Securities Legislation

Laws and regulations governing the issuance, trading, and sale of securities to protect investors and ensure fair markets.

Common Method

A widely used or accepted technique or procedure for achieving a task or solving a problem.

Common Shares

Shares to which no preferential rights or privileges are attached.