Finance 4780 Cambodia Case:

QUESTION 1

According to the case study, which of the following are true of the microfinance sector in Cambodia? Select all that apply.

a. Small microfinance institutions in Cambodia are not regulated due to the high cost

b. Microfinance is a regulated activity in Cambodia

c. The National Bank of Cambodia restricts interest rates charged by microfinance institutions in the country

d. Cambodia has a developed and competitive microfinance industry

QUESTION 2

Which is an accurate definition of a Cambodian tongtin ROSCA according to the case study?

a. An individual loan product where community members determine who receives microfinance bank money based on an agreed system of voting

b. A group loan product created and administered by microfinance banks with weekly payments

c. A self selected group where members contribute a sum of money at a fixed interval and then distribute the lump sum of money based on an agreed system of bidding

d. None of these

QUESTION 3

According to the Cambodia case study, the microfinance loan is a substitute for the informal Tongtin financing club.

True

False

QUESTION 4

What risks does the Cambodia ROSCA (tongtin) participation pose to the client?

a. Regulation from the National Bank of Cambodia

b. Third party guarantees of loans made in tongtin

c. Ex post moral hazard

d. Cash flow shocks for participants

QUESTION 5

According to the case, why do Cambodians such as Thida continue to participate in the ROSCA (tongtin) despite the potential risks?

a. source of emergency cash, higher returns than other savings methods, regulated financial service

b. None of these

c. source of emergency cash, higher returns than other savings methods, important way to support the community

d. source of emergency cash, lower returns than other savings methods, important way to support the community

QUESTION 6

Tongtin participation makes it difficult for microfinance providers to understand ________, and to reduce that risk they can ___________. Select the best answer below to fill in the blanks.

a. total client indebtednesses, request information from client about ROSCA participation

b. total client savings, request information from other microfinance banks

c. None of these

d. moral hazard, charge lower interest rates

QUESTION 7

What financial products in the regulated microfinance sector is the tongtin ROSCA most similar to ?

a. None of these

b. University bank individual loans

c. Grameen 16 decisions

d. Grameen style group loans

QUESTION 8

One way the Cambodian tongtin ROSCA risk is reduced for participants such as Thida is:

a. The group leader acts as a partial underwriter

b. The government guarantees the payments

c. None of these

d. The group members guarantee payments of other participants

QUESTION 9

What other products or services could Thida have used to solve the problems she is facing in the Cambodia case study?

a. Insurance to cover medical expenses for the family

b. Loan to cover university fees for daughter

c. Savings account to manage cash flow from jasmine sales

d. Loan to purchase fertilizer

QUESTION 10

How did the availability of many sources of capital impact Thida's in the Cambodia case study?

a. Easier to calculate the total amount due to different people

b. Reduced the percent of her monthly cashflow owed to lenders and ROSCAs

c. Difficulty tracking the payments due to different people

d. None of these