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
Date Written: November 3, 2011
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: Suggested Citation