What Does It Mean for a Microfinance Institution (MFI)to Be

question 13

Multiple Choice

What does it mean for a microfinance institution (MFI) to be financially sustainable?

• A) It has earned a large enough grant to operate without interest and fees from loans
• B) Its revenue from interest and fees exceeds its operating costs
• C) Donors have guaranteed the funds will remain available
• D) It has earned the funds through commercialization

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Definitions:

Total Costs

The complete aggregate of expenses incurred by a business, encompassing both fixed and variable costs.

Differential Revenue

The difference in revenue between two alternative decisions or scenarios.

Course of Action

A plan or strategy designed to achieve a specific goal or solve a problem.

Differential Cost

The difference in total cost between two alternative decisions or scenarios.