Reference no: EM133074450

According to the New York Times article "Leveraging Web Gains to Aid the Poorest" published February 26, 2018,

"After Reeza Zarook cashed out of Anything.lk, Sri Lanka's first e-commerce company, he decided to tackle a big concern: 40% of the population couldn't buy from his company. These people were so poor, traditional banks wouldn't extend them any credit.

Mr. Zarook wanted to help poor people buy consumer goods they need -- a smartphone, a computer, a gas stove -- and that typical microfinance loans don't cover.

In 2014, he launched Rukula, which enables vendors of nearly any type of consumer good to sell it to customers on credit. A Rukula staffer evaluates, over the phone, potential customers' creditworthiness in three-to-four-minute interviews.

"We want to know if they have no ties, commitments or stability and they'll just disappear into the night, or are they in very entrenched family units with young kids at school," Mr. Zarook says. "School is very, very important here even if you move, you don't move schools. So that lets us decide whether this person will pay us back."

Rukula charges 40% interest on a six-month loan. This might sound usurious, but it is typical for microloans, which have relatively higher service costs than loans available in rich countries.

On average, loans are paid back in 15 months. Rukula turned a profit within two years."

Which of the following is true?

a. Rukula is a member of the Women's World Banking network

b. Rukala is following the Grameen bank group model for lending

c. Rukula's four-minute underwriting interviews are based on Accion Inernational's CAMEL diagnostic tool

d. Rukula uses school ties to evaluate Ex Post Moral Hazard