Study 1 finds that microfinance loans enable women entrepreneurs in rural villages to launch small enterprises.
Study 2 finds that high interest rates charged by predatory microfinance providers trap vulnerable borrowers in debt spirals.
What synthesis reconciles both findings?
Answer and explanation
Correct answer: D. Microfinance can empower rural borrowers, but only when paired with strict interest caps and fair lending standards
- Step 1: Microfinance encourages enterprise (Study 1) but predatory rates cause debt spirals (Study 2). Step 2. Synthesis requires preserving credit access while enforcing regulatory caps against predatory usury. Answer: Microfinance can empower rural borrowers, but only when paired with strict interest caps and fair lending standards. Why not the others: Barring credit eliminates enterprise benefits, while ignoring interest rates contradicts Study 2.
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