Microlenders offer small loans to borrowers who are unable to get loan

Question 1. The author's primary objective in the passage is to

A. introduce readers to the concept and history of microcredit.
CORRECT -- The passage opens with introducing the reader to what microlenders do, and how microcredit helps lead people out of poverty. It then describes the origin, growth, and impact of microcredit (in line with answer choice A).

B. chronicle Professor Yunus's path to the Nobel Peace Prize.
INCORRECT -- Although Professor Yunus is introduced in the second half of the passage, he is mentioned as a part of the origin of microcredit and is not the main focus of the passage itself.

C. explain that women are better credit risks than men.
INCORRECT -- Near the end of the passage, the author mentions in passing that "Over 80 percent of those receiving microloans are women, who have proved to be lower credit risks than men". This was mentioned to provide more information on the history and context of microcredit, which is the main objective of the passage.

D. demonstrate that microcredit is an ineffective way to bring families up from poverty.
INCORRECT -- On the contrary, the author states at the beginning of the passage that "Microlending programs allow very poor people to develop or expand self-employment projects that generate additional income and lead them out of poverty", and includes an example of a successful Sri Lankan candy producer who started with a $100 microloan.

E. predict the future of microcredit.
INCORRECT -- Out of scope: the author is focused on discussing the history and growth of microcredit, not on speculating what the future will be. At the end the author quotes the Nobel Committee that microcredit is a means for lasting peace, but this is merely a quote and the author does offer his own opinion.


Question 2. The author of this passage would most likely agree with which of the following statements?

A. Microlenders are foolish not to insist on credit scores and collateral from their potential clients.
INCORRECT -- The author positions microlending as an alternative to traditional lenders, which "allow very poor people to develop or expand self-employment projects that generate additional income and lead them out of poverty". This passage mostly focuses on the success and positive socio-economic impact of microcredit, with no mention of criticisms on microlenders/ the microcredit model.

B. Microcredit is a virtually risk-free investment.
INCORRECT -- The author never explicitly states that this model is low-risk, although based on the profile of the borrowers ("people in poverty who have no credit history, collateral, or steady employment") low-risk seems unlikely without more information.

C. Microloans have only a small impact on relatively few people.
INCORRECT -- On the contrary, the author provides statistics that strongly imply the opposite (large impact on many people): "In 1983, he founded the Grameen Bank, which now has over 2,500 branches and 20,000 employees... In 2009, more than 128 million families received microloans".

D. Professor Yunus has demonstrated that business interests and social consciousness are not mutually exclusive.
CORRECT -- Evidently, Yunus's microcredit model has had a huge positive social impact ("Nobel Committee acknowledged that "lasting peace cannot be achieved unless large population groups find ways to break out of poverty. Microcredit is one such means"). Yunus's Grameen bank must also be successful as a business, if it "now has over 2,500 branches and 20,000 employees". In addition, the microcredit model gives people in poverty the opportunity "to develop or expand self-employment projects that generate additional income and lead them out of poverty". Their business success can also lead to increased employment within their communities (i.e. the Sri Lankan candy maker), further demonstrating how business interests and social impact can be aligned.

E. The microcredit model works only in third-world countries.
INCORRECT -- The author never states that the microcredit model only works in 3rd world countries, only that "Microlenders offer small loans to borrowers who are unable to get loans from traditional lenders... people in poverty who have no credit history, collateral, or steady employment." (a demographic that exists in every country in the world)


Question 3. The author first quotes the Nobel Committee in order to

A. state that microlending leads to world peace.
INCORRECT -- This answer choice seems correct, except that it was technically the second quote in the passage associated with the Nobel Committee/ right at the end of the passage ("the Nobel Committee acknowledged that "lasting peace cannot be achieved unless large population groups find ways to break out of poverty. Microcredit is one such means.""). Since this questions specifies "first quotes", I prefer answer choice B.

B. confirm that microlending has successfully led people out of poverty.
CORRECT -- The first quote in the passage associated with the Nobel Committee is "Professor Yunus was awarded the Nobel Peace Prize for "efforts to create economic and social development from below,"" right alongside a list of successes and positive social impact that microcredit has realized. (winning the Nobel Peace prize would be the highest recognition for that achievement)

C. illustrate the prestige of winning the award.
INCORRECT -- Although the Nobel Peace prize is definitely prestigious, the purpose of the information and quote is to emphasize the incredible impact that microcredit has had on socio-economic development.

D. argue that development from below is more effective than traditional large-scale economic development programs.
INCORRECT -- Out of scope: Although the author has made a strong case that development from below can be extremely effective, the author did not compare against traditional large-scale development at all.

E. defend against critics who feel that microlending is ineffective.
INCORRECT -- Out of scope: In fact, there is no mention of any criticism against the microcredit model at all (based on this passage, microlending seems like an ideal model)

--
Author is providing some facts about micro lenders , followed by examples and a bit of history about micro lending process. We can say ,tone of the passage is neutral , since that is no opinion of Author..


1. The author's primary objective in the passage is to

A. introduce readers to the concept and history of microcredit.
B. chronicle Professor Yunus's path to the Nobel Peace Prize.
C. explain that women are better credit risks than men.
D. demonstrate that microcredit is an ineffective way to bring families up from poverty.
E. predict the future of microcredit.

imo ,--Option A, is correct . Since The author is intending to provide some facts about microlending and its history

Option B and C is partial scope of the psg and that is not the intention of the author .
Option D is not correct since author is providing facts about microcredit is an effective way to bring families up from poverty.
Option E is out of scope as author hasn't given any prediction


2. The author of this passage would most likely agree with which of the following statements?

A. Microlenders are foolish not to insist on credit scores and collateral from their potential clients.
B. Microcredit is a virtually risk-free investment.
C. Microloans have only a small impact on relatively few people.
D. Professor Yunus has demonstrated that business interests and social consciousness are not mutually exclusive.
E. The microcredit model works only in third-world countries.

imo ,--Option D, is correct . Since The author has demonstrated facts about professor ,who is a economist and founder of Grameen Bank , to help poor people. So the business interest and social consciousness are not mutually exclusive.
Option A , B and C is Out of scope , there is no information given about these choices
Option E is out of scope as as well

3. The author first quotes the Nobel Committee in order to

A. state that microlending leads to world peace.
B. confirm that microlending has successfully led people out of poverty.
C. illustrate the prestige of winning the award.
D. argue that development from below is more effective than traditional large-scale economic development programs.
E. defend against critics who feel that microlending is ineffective.

imo ,--Option B, is correct . Since the author want to qualify that the concept of micro lending is successful .
Option A , C,D and E is Out of scope , there is no information given about these choices

The passage follow the structure as -
Introduction of microlending, Impact with example. Origin and achievements, Acknowledgment of its importance.

1. The author's primary objective in the passage is to

A. introduce readers to the concept and history of microcredit.
The passage introduces microcredit and goes on to its historical impacts with example. The passage tries to introduce its development and the underlying concept of working too. Correct.
B. chronicle Professor Yunus's path to the Nobel Peace Prize.
This is not the primary objective. The passage brings in Professor Yunus while introducing the microcredit, but it does not follow the life of the professor.
C. explain that women are better credit risks than men.
The passage says "Over 80 percent of those receiving microloans are women, who have proved to be lower credit risks than men" while talking the eventual achievements, but such comparison is not the prime focus of the passage.
D. demonstrate that microcredit is an ineffective way to bring families up from poverty.
This information is not supported in the passage. The passage does not talk on the negative aspects of microcredit.
E. predict the future of microcredit.
The passage refrain to comment the future of microcredit and limits to its history and current status only.

A

2. The author of this passage would most likely agree with which of the following statements?

A. Microlenders are foolish not to insist on credit scores and collateral from their potential clients.
The author's tone is non-negative or non-criticizing . The passage does not talk on the negative aspects of microcredit.
B. Microcredit is a virtually risk-free investment.
When the author says "Over 80 percent of those receiving microloans are women, who have proved to be lower credit risks than men " , he talks about the risks and can't imply that microcredit is a risk-free investment.
C. Microloans have only a small impact on relatively few people.
The author can't agree with it when the passage says "In 2009, more than 128 million families received microloans" . The impact on 128 million families may not considered small.
D. Professor Yunus has demonstrated that business interests and social consciousness are not mutually exclusive.
Professor Yunus discovered the power of small loans. He was awarded the Nobel Peace Prize for "efforts to create economic and social development from below." Thus, authoris most likely agree that the professor demonstrated the connectivity between business interests and social consciousness.
E. The microcredit model works only in third-world countries.
There is no mention of what these third-world countries are.

D

3. The author first quotes the Nobel Committee in order to

A. state that microlending leads to world peace.
Nobel Committee acknowledged that "lasting peace cannot be achieved unless large population groups find ways to break out of poverty. Microcredit is one such means." This implies that microlending is one of the means to achieve the peace. Correct.
B. confirm that microlending has successfully led people out of poverty.
With the quotes, the author does not claim or confirm that microlending has successfully led people out of poverty. Microlending may be the means to break out the poverty in order to achieve the peace, but the implication is not to confirm it.
C. illustrate the prestige of winning the award.
The author limits to talk on the well-known prestige of the noble prize and echoes the word of committee to underline the role of microcredit.
D. argue that development from below is more effective than traditional large-scale economic development programs.
There is no such comparison stated or implied from the passage.
E. defend against critics who feel that microlending is ineffective.
The author does not mention of what critics say hence the quotes are not defensive ones.

A

1. The author's primary objective in the passage is to

More emphasis were made on the history and concept of microcredit. So, A is the answer.
A. introduce readers to the concept and history of microcredit.
B. chronicle Professor Yunus's path to the Nobel Peace Prize.
No, this is not the author's primary objective, it was about microlending and not about Yunu. So, eliminate B.
C. explain that women are better credit risks than men.
Yes, this is a point explained in the passage, but not the primary objective.
D. demonstrate that microcredit is an ineffective way to bring families up from poverty.
It's in fact an effective way to eradicate poverty
E. predict the future of microcredit.
Out of scope.

2. The author of this passage would most likely agree with which of the following statements?

This requires an answer which supports microlending.
A. Microlenders are foolish not to insist on credit scores and collateral from their potential clients.
The main advantage of microlending is to lend poor who have no credit history, So eliminate A.
B. Microcredit is a virtually risk-free investment.
Yes, yes, yes!
C. Microloans have only a small impact on relatively few people.
With the examples given in the passage, it's clear that the impact is high, So eliminate C
D. Professor Yunus has demonstrated that business interests and social consciousness are not mutually exclusive.
They are!
E. The microcredit model works only in third-world countries.
No, nothing like that was mentioned.

3. The author first quotes the Nobel Committee in order to

A. state that microlending leads to world peace.
Yes, notice the last few lines of the passage, when poverty decreases -> Peace increases and microlending is actually helping it.
B. confirm that microlending has successfully led people out of poverty.
C. illustrate the prestige of winning the award.
This is very weak statement.
D. argue that development from below is more effective than traditional large-scale economic development programs.
No argument is made regarding this.
E. defend against critics who feel that microlending is ineffective.
Nope. It's actually stating about peace.

So, IMO, the answers are A,B,A

1. The author's primary objective in the passage is to

answer is a) introduce readers to the concept and history of microcredit.

A. introduce readers to the concept and history of microcredit: yes this is the answer as other options can be eliminated and the passage is all about concept of microcredit and the history of microcredit .
B. chronicle Professor Yunus's path to the Nobel Peace Prize : this is just partial scope 2-3 lines which tells about Yunus getting Nobel Peace Prize for being the originator for Microcredit . Actually passage is more about Microcredit than chronicle Yunus's path to Nobel Prize .Full scope of passage is covered under introducing readers to the concept and history of microcredit.
C. explain that women are better credit risks than men:actually this is just 1 line in passage and just some very small part of scope . Full scope of passage is covered under introducing readers to the concept and history of microcredit.
D. demonstrate that microcredit is an ineffective way to bring families up from poverty: actually this is reversal of facts in passage - passage actually says that Microcredit is one such means for large population groups to find ways to break out of poverty. So its out as its 180 degree opposite of what author wants to convey .
E. predict the future of microcredit: Nowhere in the passage any prediction on the future of microcredit is done , this is out of scope .scope of passage is covered under introducing readers to the concept and history of microcredit.

2. The author of this passage would most likely agree with which of the following statements?

answer is d)Professor Yunus has demonstrated that business interests and social consciousness are not mutually exclusive.
A. Microlenders are foolish not to insist on credit scores and collateral from their potential clients: actually nowhere discussion on foolishness on part of microlenders on not insisting on on credit scores and collateral from their potential clients is there in the passage . So this is external information , so out
B. Microcredit is a virtually risk-free investment:nowhere in passage is it said that microcredit is virtaully risk free investment , this is also external information , so its out . Only some comparison on women being proven to be lower credit risk than men is mentioned .
C. Microloans have only a small impact on relatively few people: actually this is reversal of facts in the passage , the passage says in last line that Microcredit is one such means for large population groups find ways to break out of poverty, so its out
D. Professor Yunus has demonstrated that business interests and social consciousness are not mutually exclusive: yes this looks fine as all other options can be eliminated and because this line in para demonstrates it - In 1983, he founded the Grameen Bank, which now has over 2,500 branches and 20,000 employees, and is 90 percent owned by borrower shareholders .So have an illustration for business being run where Grameen bank has so many branches , so many employees and 90% owned by money borrower sharesholders .Then its also given in passage- illustrating social consiousness that - In 2006, Professor Yunus was awarded the Nobel Peace Prize for "efforts to create economic and social development from below.". So we can say that Yunus demonstrated that business interests and social consciousness are not mutually exclusive.

E. The microcredit model works only in third-world countries.: Only is a very extreme word and we cannot infer that microcredit works only in third -world countries . This is a trap since exmaples of Third world countries like Bangladesh and Sri lanka are given while explaining micro-credit , so its out

3. The author first quotes the Nobel Committee in order to

answer is b) confirm that microlending has successfully led people out of poverty.
A. state that microlending leads to world peace : actually author says that large population groups finding ways to break out of poverty is necessary for lasting peace and Microcredit is one such way for large population to break out of poverty . So Microcredit is actually one of the ways which helps in the necessary condition of lasting peace. Thus microfinance is not sufficient condition to lasting peace . Also passage says lasting peace and the answer says world peace which could be inferred in different manner for distinction between regional or world peace
B. confirm that microlending has successfully led people out of poverty: yes this is the answer , as author says that large population groups finding ways to break out of poverty is necessary for lasting peace and Microcredit is one such way for large population to break out of poverty . So yes the author uses this qoute to confirm that microlending has successfully led people out of poverty as its a means for large population to break out of poverty
C. illustrate the prestige of winning the award: no author does not want to illustrate the prestige of winning the award,on the contrary author wants to stress on microcredit as a means to successfully lead people out of poverty through the qoute in the passage
D. argue that development from below is more effective than traditional large-scale economic development programs: no such comparison on development from below being more effective than traditional large-scale economic development programs is mentioned in qoute .author just wants to stress on microcredit as a means to successfully lead people out of poverty through the qoute in the passage
E. defend against critics who feel that microlending is ineffective: in the passage there is no mention of any critic feeling that microlending is ineffective , so there is no question of Nobel Committee giving this qoute to defend from critics of microlending , so its out

Answer IMO:
1. A
2. D
3. D

1. The author's primary objective in the passage is to

A. introduce readers to the concept and history of microcredit.
B. chronicle Professor Yunus's path to the Nobel Peace Prize.
C. explain that women are better credit risks than men.
D. demonstrate that microcredit is an ineffective way to bring families up from poverty.
E. predict the future of microcredit.
Answer A - The passage starts by defining Microlending and thus introduces the concept. And then explains the benefits and how it started and eventually shaped by introducing a few key examples from history.

2. The author of this passage would most likely agree with which of the following statements?

A. Microlenders are foolish not to insist on credit scores and collateral from their potential clients.
B. Microcredit is a virtually risk-free investment.
C. Microloans have only a small impact on relatively few people.
D. Professor Yunus has demonstrated that business interests and social consciousness are not mutually exclusive.
E. The microcredit model works only in third-world countries.
Answer D: The only apt answer via POE. Option D- Professor Yunus with an objective to alleviate poverty and help scale micro-businesses where a poor doesn't have enough money to start a business, it can be concluded that these 2 factors need not be dependent on each other and are mutually exclusive.

3. The author first quotes the Nobel Committee in order to

A. state that microlending leads to world peace.
B. confirm that microlending has successfully led people out of poverty.
C. illustrate the prestige of winning the award.
D. argue that development from below is more effective than traditional large-scale economic development programs.
E. defend against critics who feel that microlending is ineffective.
Answer D: It intends to establish the fact that unless the people at bottom-most pyramid, poor people, put an effort to come out of poverty, it is not really possible to alleviate poverty altogether. This also sets up the base that it is more effective than traditional large-scale programs.

Hurrary, last passage of this competion.

1. The author's primary objective in the passage is to

A

A. introduce readers to the concept and history of microcredit.
Yes passage introduces the concept of microlending, and it shows who originated the program
B. chronicle Professor Yunus's path to the Nobel Peace Prize.
There is no chronic of Professor Yunus's path to the Nobel Peace Prize is given
C. explain that women are better credit risks than men.
Expalantion of why women are better credit risks than men is not the primary purpose of the passage
D. demonstrate that microcredit is an ineffective way to bring families up from poverty.
"Ineffective" makes it opposite of what author said.
E. predict the future of microcredit.
The author never predict any future of microcredit.

2. The author of this passage would most likely agree with which of the following statements?

D

A. Microlenders are foolish not to insist on credit scores and collateral from their potential clients.
The author will not say that microlender are foolish, instead, the author admire microlenders
B. Microcredit is a virtually risk-free investment.
We can not deduce that Microcredit is a completely risk-free investment.
C. Microloans have only a small impact on relatively few people.
Microlender program has a big impact on the people and peace.
D. Professor Yunus has demonstrated that business interests and social consciousness are not mutually exclusive.
Yes professor Yunus has shown that business interest and social consciousness are connected, that's why he has got the noble prize for the efforts to create economic and social development from below
E. The microcredit model works only in third-world countries.
No we cannot say that the microcredit model works only in third-world countries.

3. The author first quotes the Nobel Committee in order to

A........Read the last sentence of the passage to understand why the author talks about the "Nobel committee"
In their press release, members of the Nobel Committee acknowledged that "lasting peace cannot be achieved unless large population groups find ways to break out of poverty. Microcredit is one such means."

A. state that microlending leads to world peace.
Microlending leads people out of poverty, and lasting peace cannot be achieved unless large population groups find ways to break out of poverty. So we can conclude that Microlending leads to world peace.
B. confirm that microlending has successfully led people out of poverty.
Nobel committee is not used as evidence to confirm that microlending has successfully led people out of poverty.
C. illustrate the prestige of winning the award.
Nobel committee is not used as an example of the prestige of winning the award.
D. argue that development from below is more effective than traditional large-scale economic development programs.
No such argument was made in the passage.
E. defend against critics who feel that microlending is ineffective.
noble committee is not for defend against critics.

1. The author's primary objective in the passage is to

A. introduce readers to the concept and history of microcredit.-correct , the passage talks about how micro credit came into picture and history of it.
B. chronicle Professor Yunus's path to the Nobel Peace Prize. Incorrect , the primary objective of the passage is not about how Professor won the Nobel Peace Prize.
C. explain that women are better credit risks than men.-Incorrect .though women are better credit risks than men but the primary objective is not that.
D. demonstrate that microcredit is an ineffective way to bring families up from poverty. Incorrect –Microcredit proves to be an effective way .Opposite ans
E. predict the future of microcredit.Incorrect –Nobody or no where there is a prediction of micro credit .
2. The author of this passage would most likely agree with which of the following statements?

A. Microlenders are foolish not to insist on credit scores and collateral from their potential clients.Incorrect, irrelevant.
B. Microcredit is a virtually risk-free investment.Correct , mico credit has helped various people to help them overcome poverty.
C. Microloans have only a small impact on relatively few people.-Incorrect , rather this created a great impact.
D. Professor Yunus has demonstrated that business interests and social consciousness are not mutually exclusive.Incorrect .
E. The microcredit model works only in third-world countries.Incorrect , there is no mention regarding the countries where it works well and where it doesn’t .


3. The author first quotes the Nobel Committee in order to
A. state that microlending leads to world peace.Incorrect , the author has not mentioned world peace .
B. confirm that microlending has successfully led people out of poverty.Correct , as stated around the lines “lasting peace cannot be achieved unless large population groups find ways to break out of poverty. Microcredit is one such means”
C. illustrate the prestige of winning the award.Incorrect , irrelevant .
D. argue that development from below is more effective than traditional large-scale economic development programs. Incorrect , author doesn’t bring any comment on how much the program will be effective.
E. defend against critics who feel that microlending is ineffective.Incorrect , the author doesn’t defend anything .

Imo- A
1. The author's primary objective in the passage is to

A. introduce readers to the concept and history of microcredit.
CORRECT
B. chronicle Professor Yunus's path to the Nobel Peace Prize.
-INCORRECT
C. explain that women are better credit risks than men.
incorrect - no comparison between men and women given

D. demonstrate that microcredit is an ineffective way to bring families up from poverty.-incorrect

E. predict the future of microcredit.- incorrect

Imo-D

2. The author of this passage would most likely agree with which of the following statements?

A. Microlenders are foolish not to insist on credit scores and collateral from their potential clients. -incorrect

B. Microcredit is a virtually risk-free investment.-
incorrect not mentioned in passage

C. Microloans have only a small impact on relatively few people.
Incorrect -use of only make it extreme

D. Professor Yunus has demonstrated that business interests and social consciousness are not mutually exclusive.
Correct

E. The microcredit model works only in third-world countries.
Incorrect -use of only make it extreme


IMO-b

3. The author first quotes the Nobel Committee in order to

A. state that microlending leads to world peace.
Incorrect word peace make is incorrect

B. confirm that microlending has successfully led people out of poverty.
Correct-members of the Nobel Committee acknowledged that "lasting peace cannot be achieved unless large population groups find ways to break out of poverty. Microcredit is one such means."
According to supporting lines

C. illustrate the prestige of winning the award.
INCORRECT- author is not illustrate the prestige of winning the award.

D. argue that development from below is more effective than traditional large-scale economic development programs.
Incorrect Author is not argue that development from below is more effective than traditional large-scale economic development programs.

E. defend against critics who feel that microlending is ineffective.
Incorrect- $Author not defend against critics who feel that microlending is ineffective.

Posted from my mobile device

Hello Everyone!

OAs of this RC have been revealed, this is a Medium-Hard level passage, First question is easy, Second questions is hard, with options C and D as the competitors. The last question is medium level.

Excellent Vie3nrose and Deepakjhamb

Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
_________________