2 mins 40 secs to get to the answer.
Summary:
Microlending (which is good) became popular in the '70s to bypass all the problems associated with normal lending and also to reach to the lowest rung of society ( in difficult parts of the world where foreign aid matters) as they were left out of the traditional lending sphere as they did not have good credit history of steady jobs. It did great as 96% of loans were repaid (less than $1000). The passage goes on to talk about the details of implementation - the first method stayed the most common despite certain cons associated with it. The passage goes on to outline the drawbacks in administrative setup and ends without giving a solution.
Inference type question completely dealing with the first paragraph of the passage. Asks why traditional lending is bad and this info can be found in the first few lines of the passageIt can be inferred from the passage that the author makes which of the following assumptions about traditional lending in the form of foreign aidA)Traditional lenders are more interested in earning profit than in giving assistance.
TRAP - real world trap as the passage does not mention this at all even though this may be true. Hence we cannot infer this. Discard.B)Leaders of struggling countries are dissatisfied with the approach of traditional lending.
Nothing about the dissatisfaction of leaders is mentioned. Discard.C)Traditional lending is not flexible enough to loan amounts less than $1,000.
Reverse logic. Microlending deals with amounts less than $1000 but we cannot infer that traditional lending does not or is not flexible enough to do soD)A complicated administration process often limited the money available to individuals and families.
BINGO - this is verbatim from the first few lines of the passage. "Bureaucracy and administration costs cause problems" is mentioned.E)Traditional lending is outdated and will eventually be replaced by microloan programs.
"Outdated" cannot be inferred as nothing is mentioned. Discard.Hope this helps.