A Methodology for the Assessment of Potential Demand and Optimal Supply of Entrepreneurial Microcredit

Review of Development Finance, 2012 (DOI org/10.1016/j.rdf.2012.05.003)

Posted: 5 Nov 2011 Last revised: 5 Jan 2014

See all articles by Ayi Gavriel Ayayi

Ayi Gavriel Ayayi

Université du Québec

Nurmukhammad Yusupov

Audencia Nantes School of Management

Date Written: November 3, 2011

Abstract

We propose a methodology for the assessment of potential demand for entrepreneurial micro-credit and optimal supply. We show that the total demand is a combination of the demand that stems from the active poor plus the demand generated by a motivator agent among the entrepreneurial non-motivated poor. To illustrate our analysis, we show that in France the potential annual stock of the entrepreneurial micro-credit clients should be about 131,000-251,000 if the actual number of the poor adults does not change significantly over time. We also show that the proportion of the potential demand satisfied by a micro-finance institution depends on its objective i.e. either it is socially oriented or a profit maximizer.

Keywords: Entrepreneurial Microcredit, Potential Demand, Optimal Supply, France

JEL Classification: G21, R22, R39

Suggested Citation

Ayayi, Ayi Gavriel and Yusupov, Nurmukhammad A., A Methodology for the Assessment of Potential Demand and Optimal Supply of Entrepreneurial Microcredit (November 3, 2011). Review of Development Finance, 2012 (DOI org/10.1016/j.rdf.2012.05.003), Available at SSRN: https://ssrn.com/abstract=1954217

Ayi Gavriel Ayayi (Contact Author)

Université du Québec ( email )

3351 Boulevard des Forges C.P 500
Trois Rivières, Québec G9A 5H7
Canada
819 376-5011 ext 3137 (Phone)

Nurmukhammad A. Yusupov

Audencia Nantes School of Management ( email )

8 route de la Jonelière, BP 31222
Nantes Cedex 3, Cedex 3 44312
France

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