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The Grameen Bank, founded in Bangladesh by Nobel Peace

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The Grameen Bank, founded in Bangladesh by Nobel Peace  [#permalink]

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New post 29 Apr 2018, 22:05
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The Grameen Bank, founded in Bangladesh by Nobel Peace Prize Laureate, Dr. Muhammad Yunus, who is also credited for giving life to the concept of microcredit/microfinance, is one of the most popular models of social business, a business that operates primarily for addressing social needs and not for-profit. Based on the concept of microfinance, Grameen provides microloans, small loans, to the poor and those living beyond the reach of traditional finance, in order to promote income generating activities, avoiding the more traditional form of poverty alleviation - aid donations. The original focus of the Grameen Bank was on rural people with no credit history and no collateral. However, the bank rapidly expanded, giving the illusion of a win-win situation that yielded both profits for Grameen Bank and huge improvements in development for Bangladesh. Private, for-profit organizations around the world wrongly judged the situation, thinking that they could first and foremost profit from this type of venture while developing the country in the process. This view was indeed tainted since Grameen’s goal was development and any profits were an added bonus. Because of these wrong expectations, the Grameen model has achieved limited success in countries other than those in South-East Asia, though the concept of microfinance has had better luck, with many countries now running profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would.

1.Which of the following best captures the main idea of the passage?
A.To explain a model and a reason behind its limited success in some countries
B.To show how the focus of a concept changed as it achieved success with time
C.To explain the reason behind the success of a concept in South East Asian countries
D.To highlight how a model is a not very ideal one for-profit oriented microfinance oriented organizations
E.To discuss the various models of microfinance operational in countries within and outside South East Asia



2. Which one of the following statements can be inferred about the for-profit microfinance institutions?
A.The coexistence of profit and development under the Grameen model was not interpreted correctly by such institutions
B.They are profitable models of social business.
C.They were responsible for the complete failure of Grameen as a model of microfinance.
D.Such institutions are not operational in Bangladesh.
E.Such institutions are not likely to offer loans to applicants who do not have any collateral security to offer.


3.According to the passage, which one of the following statements is true?
A.When Grameen started functioning, there were fewer people in the urban areas of Bangladesh who applied for a loan from it than there were when it became more successful
B.There is a limited scope of Grameen’s success in countries outside South East Asia.
C.Microfinance as a concept is more successful for for-profit oriented microfinance institutions than for Grameen.
D.Granting a sum of money as charity to the poor is not a part of Grameen’s operations.
E.Institutions offering traditional loans charge much higher interest rates than Grameen does.


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Re: The Grameen Bank, founded in Bangladesh by Nobel Peace  [#permalink]

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New post 30 Apr 2018, 01:28
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Summary: Grameen Bank is a model of social business and not for profit.
It expanded, reported profits and contributed to the development of Bangladesh.
Other countries tried to replicate the success of Grameen Bank but failed to do so.

1. Which of the following best captures the main idea of the passage?

A.To explain a model and a reason behind its limited success in some countries - Correct
B.To show how the focus of a concept changed as it achieved success with time - The focus of Grameen Bank as a concept did not change.
C.To explain the reason behind the success of a concept in South East Asian countries - Opposite.
D.To highlight how a model is a not very ideal one for-profit oriented microfinance oriented organizations - Partial scope.
E.To discuss the various models of microfinance operational in countries within and outside South East Asia - Not relevant

Answer: A

2. Which one of the following statements can be inferred about the for-profit microfinance institutions?
A.The coexistence of profit and development under the Grameen model was not interpreted correctly by such institutions - Correct
B.They are profitable models of social business. - Opposite. They were not started with the intentions of profit
C.They were responsible for the complete failure of Grameen as a model of microfinance. - Not stated.
D.Such institutions are not operational in Bangladesh. - Not stated
E.Such institutions are not likely to offer loans to applicants who do not have any collateral security to offer. - Opposite. They offer no collateral loans at high interest .

Answer: A

3.According to the passage, which one of the following statements is true?
A.When Grameen started functioning, there were fewer people in the urban areas of Bangladesh who applied for a loan from it than there were when it became more successful - No information on the number of people who applied for loan in the urban areas before and after it became popular.
B.There is a limited scope of Grameen’s success in countries outside South East Asia. - There may be scope but the intention was different in countries outside South East Asia.
C.Microfinance as a concept is more successful for for-profit oriented microfinance institutions than for Grameen. - Not stated.
D.Granting a sum of money as charity to the poor is not a part of Grameen’s operations. - Correct. Grameen gave out loans and did not grant money as charity to the poor.
E.Institutions offering traditional loans charge much higher interest rates than Grameen does. - Not stated.

Answer: D
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Re: The Grameen Bank, founded in Bangladesh by Nobel Peace  [#permalink]

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New post 15 Oct 2018, 19:59

+1 kudos to the posts containing answer explanations of all questions


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Re: The Grameen Bank, founded in Bangladesh by Nobel Peace  [#permalink]

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New post 15 Oct 2018, 22:40
1
Q1 A
Q2 A
"Private, for-profit organizations around the world wrongly judged the situation, thinking that they could first and foremost profit from this type of venture while developing the country in the process"

Q3 D
"Grameen provides microloans, small loans, to the poor and those living beyond the reach of traditional finance, in order to promote income generating activities, avoiding the more traditional form of poverty alleviation - aid donations"
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Re: The Grameen Bank, founded in Bangladesh by Nobel Peace  [#permalink]

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New post 16 Oct 2018, 08:12
1
para: micro-finance concept
its intention
effect on Bangladesh and others
limited success

Q1: A
the purpose is to explain the model and its limited success

Q2 : A
apply POE
A.The coexistence of profit and development under the Grameen model was not interpreted correctly by such institutions - hold
B.They are profitable models of social business. - 180 : non profit is moto
C.They were responsible for the complete failure of Grameen as a model of micro-finance. - no mention of failure
D.Such institutions are not operational in Bangladesh. - no mention of such thing
E.Such institutions are not likely to offer loans to applicants who do not have any collateral security to offer. - 180 : they grant people with no collateral

so A is best

Q3 D
apply POE
A.When Grameen started functioning, there were fewer people in the urban areas of Bangladesh who applied for a loan from it than there were when it became more successful : number of people has no mention
B.There is a limited scope of Grameen’s success in countries outside South East Asia. : wrap :limited success is there but scope limited is not mentioned
C.Microfinance as a concept is more successful for for-profit oriented microfinance institutions than for Grameen. comparison of the success is not mentioned
D.Granting a sum of money as charity to the poor is not a part of Grameen’s operations. refer to line 4 and 5 : gb provides microloans so charity is nowhere mentioned (hold)
E.Institutions offering traditional loans charge much higher interest rates than Grameen does: we cant say that no collateral is there but interest rate also low is superficial

D wins
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Re: The Grameen Bank, founded in Bangladesh by Nobel Peace  [#permalink]

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New post 20 Oct 2018, 21:16
1.Which of the following best captures the main idea of the passage?

Passage introduces the concept of Micro Finance and mentioned it effect on Bangladesh and Other countries,which tried to replicate this but failed.

Option A captures this and is the right answer.

2. Which one of the following statements can be inferred about the for-profit microfinance institutions?

Based on this excerpt from passage, we can clearly infer option A
Quote:
Private, for-profit organizations around the world wrongly judged the situation, thinking that they could first and foremost profit from this type of venture while developing the country in the process


3.According to the passage, which one of the following statements is true?

A.When Grameen started functioning, there were fewer people in the urban areas of Bangladesh who applied for a loan from it than there were when it became more successful -- no info about this in the passage
B.There is a limited scope of Grameen’s success in countries outside South East Asia. -- inconsistent with the info from passage
C.Microfinance as a concept is more successful for for-profit oriented microfinance institutions than for Grameen. -- never stated
D.Granting a sum of money as charity to the poor is not a part of Grameen’s operations. --hold
E.Institutions offering traditional loans charge much higher interest rates than Grameen does. --never stated

so, option D is the best choice.
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Re: The Grameen Bank, founded in Bangladesh by Nobel Peace  [#permalink]

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New post 20 Oct 2018, 22:51
Time taken: 7 minutes 30 seconds
Got all of them right.

1. A
2.B
3.D
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Re: The Grameen Bank, founded in Bangladesh by Nobel Peace  [#permalink]

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New post 12 Nov 2018, 20:03
Quote:
though the concept of microfinance has had better luck, with many countries now running profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would.


HI workout , u1983 , dave13

Does it not mean E?

3.According to the passage, which one of the following statements is true?
A.When Grameen started functioning, there were fewer people in the urban areas of Bangladesh who applied for a loan from it than there were when it became more successful
B.There is a limited scope of Grameen’s success in countries outside South East Asia.
C.Microfinance as a concept is more successful for for-profit oriented microfinance institutions than for Grameen.
D.Granting a sum of money as charity to the poor is not a part of Grameen’s operations.
E.Institutions offering traditional loans charge much higher interest rates than Grameen does.
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The Grameen Bank, founded in Bangladesh by Nobel Peace  [#permalink]

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New post 12 Nov 2018, 20:13
NandishSS wrote:
Quote:
though the concept of microfinance has had better luck, with many countries now running profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would.


HI workout , u1983 , dave13

Does it not mean E?

3.According to the passage, which one of the following statements is true?
A.When Grameen started functioning, there were fewer people in the urban areas of Bangladesh who applied for a loan from it than there were when it became more successful
B.There is a limited scope of Grameen’s success in countries outside South East Asia.
C.Microfinance as a concept is more successful for for-profit oriented microfinance institutions than for Grameen.
D.Granting a sum of money as charity to the poor is not a part of Grameen’s operations.
E.Institutions offering traditional loans charge much higher interest rates than Grameen does.


Hello NandishSS ....... I would look at the part of the passage below :

Based on the concept of microfinance, Grameen provides microloans, small loans, to the poor and those living beyond the reach of traditional finance, in order to promote income generating activities, avoiding the more traditional form of poverty alleviation - aid donations.

The aforementioned prompted me to choose D . ( Of course , as always ... I would like to have experts' views :-) )
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Re: The Grameen Bank, founded in Bangladesh by Nobel Peace  [#permalink]

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New post 12 Nov 2018, 20:23
u1983 wrote:
NandishSS wrote:
Quote:
though the concept of microfinance has had better luck, with many countries now running profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would.


HI workout , u1983 , dave13

Does it not mean E?

3.According to the passage, which one of the following statements is true?
A.When Grameen started functioning, there were fewer people in the urban areas of Bangladesh who applied for a loan from it than there were when it became more successful
B.There is a limited scope of Grameen’s success in countries outside South East Asia.
C.Microfinance as a concept is more successful for for-profit oriented microfinance institutions than for Grameen.
D.Granting a sum of money as charity to the poor is not a part of Grameen’s operations.
E.Institutions offering traditional loans charge much higher interest rates than Grameen does.


Hello NandishSS ....... I would look at the part of the passage below :

Based on the concept of microfinance, Grameen provides microloans, small loans, to the poor and those living beyond the reach of traditional finance, in order to promote income generating activities, avoiding the more traditional form of poverty alleviation - aid donations.

The aforementioned prompted me to choose D . ( Of course , as always ... I would like to have experts' views :-) )


HI u1983,

I agree with you but passage also says with many countries now running profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would. Does it not mean Institutions offering traditional loans charge much higher interest rates than Grameen does
How to eliminate E?
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Re: The Grameen Bank, founded in Bangladesh by Nobel Peace  [#permalink]

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New post 12 Nov 2018, 20:34
NandishSS wrote:
u1983 wrote:
NandishSS wrote:

HI workout , u1983 , dave13

Does it not mean E?

3.According to the passage, which one of the following statements is true?
A.When Grameen started functioning, there were fewer people in the urban areas of Bangladesh who applied for a loan from it than there were when it became more successful
B.There is a limited scope of Grameen’s success in countries outside South East Asia.
C.Microfinance as a concept is more successful for for-profit oriented microfinance institutions than for Grameen.
D.Granting a sum of money as charity to the poor is not a part of Grameen’s operations.
E.Institutions offering traditional loans charge much higher interest rates than Grameen does.


Hello NandishSS ....... I would look at the part of the passage below :

Based on the concept of microfinance, Grameen provides microloans, small loans, to the poor and those living beyond the reach of traditional finance, in order to promote income generating activities, avoiding the more traditional form of poverty alleviation - aid donations.

The aforementioned prompted me to choose D . ( Of course , as always ... I would like to have experts' views :-) )


HI u1983,

I agree with you but passage also says with many countries now running profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would. Does it not mean Institutions offering traditional loans charge much higher interest rates than Grameen does
How to eliminate E?


:-) Ok got your confusion.

As you have mentioned in the quoted text....... 'profitable microfinance institutions' ........ so , the institutions mentioned in the text are microfinance institutions not traditional loan providers.

Hope this helps !! :-)
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The Grameen Bank, founded in Bangladesh by Nobel Peace  [#permalink]

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New post 13 Nov 2018, 01:20
NandishSS wrote:
Quote:
though the concept of microfinance has had better luck, with many countries now running profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral loans than Grameen ever would.


HI workout , u1983 , dave13

Does it not mean E?

3.According to the passage, which one of the following statements is true?
A.When Grameen started functioning, there were fewer people in the urban areas of Bangladesh who applied for a loan from it than there were when it became more successful
B.There is a limited scope of Grameen’s success in countries outside South East Asia.
C.Microfinance as a concept is more successful for for-profit oriented microfinance institutions than for Grameen.
D.Granting a sum of money as charity to the poor is not a part of Grameen’s operations.
E.Institutions offering traditional loans charge much higher interest rates than Grameen does.



hello NandishSS :)

the last sentence of the passage says following:

"Profitable microfinance institutions that typically charge considerably higher interest rates for zero collateral"


i.e. higher interest rates for zero collateral


Now read E below:

E. Institutions offering traditional loans charge much higher interest rates than Grameen does.

E in general says they charge higher interest rates, whereas in the passage it says that they charge higher interest rates for zero collateral

have a great day :)
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Re: The Grameen Bank, founded in Bangladesh by Nobel Peace  [#permalink]

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New post 03 May 2019, 05:11
SajjadAhmad, GMATNinja, workout, GMATNinjaTwo
Q3) I understand option D is right. But ," based on the concept of microfinance, Grameen provides microloans, small loans, to the poor and those living beyond the reach of traditional finance" I choose E because I thought that is the reason poor have no reach to traditional finance.

Can someone please explain.
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Re: The Grameen Bank, founded in Bangladesh by Nobel Peace  [#permalink]

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New post 13 May 2019, 22:19
Hi,

Can you please explain the 3 question because I understand answer d is correct but what is wrong with b. In the 7th last line of the summary it is clearly mentioned that Grameen has limited success outside SE asia

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Re: The Grameen Bank, founded in Bangladesh by Nobel Peace  [#permalink]

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New post 22 May 2019, 07:26
blueshores wrote:
Hi,

Can you please explain the 3 question because I understand answer d is correct but what is wrong with b. In the 7th last line of the summary it is clearly mentioned that Grameen has limited success outside SE asia

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it is just a trap ..if you re-read it , you will find a trap

let me show you how

"Grameen has limited success outside SE Asia": indeed stated in the seventh line, but Option B stated "In SE Asia there was limited scope"

Please do not confuse b/w limited scope and limited success.....Re-read it and you will surely get the point.

Hope it Helps

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Re: The Grameen Bank, founded in Bangladesh by Nobel Peace   [#permalink] 22 May 2019, 07:26
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