Microfinance gives small loans at a low rate of interest specifically to lower middle income groups . Such people generally find it difficult to get the loans from the commercial banks . Grameen Bank of Bangladesh has set an example in this perspective . A study by the World Bank found that small loans increase consumer expenditure , the value of household assets , the size of the labour force and spending on children's education . ( a ) Define the rate of interest r . ( b ) Explain 02 x main reasons that why the lower middle income groups find it difficult to get loans from Commercial Banks . ( c ) Examine how the provision of small loans can help to break the vicious circle of poverty and unequal distribution of income in a country like Pakistan . Highlight the impact of household loans up to Rs 10 M on the Pakistan's economy announced by the govt .

Microfinance gives small loans at a low rate of interest specifically to lower middle income groups . Such people generally find it difficult to get the loans from the commercial banks . Grameen Bank of Bangladesh has set an example in this perspective . A study by the World Bank found that small loans increase consumer expenditure , the value of household assets , the size of the labour force and spending on children's education . ( a ) Define the rate of interest r . ( b ) Explain 02 x main reasons that why the lower middle income groups find it difficult to get loans from Commercial Banks . ( c ) Examine how the provision of small loans can help to break the vicious circle of poverty and unequal distribution of income in a country like Pakistan . Highlight the impact of household loans up to Rs 10 M on the Pakistan's economy announced by the govt .