Potential demand for microloans: A household-level study

ABSTRACT

Having an inclusive financial system is an important tool for economic and social development. Given the lack of depth of financial markets in emerging economies, microfinance represents a paradigm shift. It involves incorporating instruments into the financial management of households that can lead to a genuine reduction in vulnerability by generating greater access to durable consumer goods or housing. For this reason, this article analyzed the characteristics of households excluded from formal financial services in the city of Bahía Blanca, Argentina, in 2021. Once identified, they were used to calculate the potential demand for microcredits (MCs). This allows measuring the importance of having an alternative to meet the unsatisfied demand for small-scale credit of the population excluded from the formal financial market. Comparing the unsatisfied needs with the actual supply of MCs, the results obtained show a considerable scope for developing MC institutions in the city (but also in Argentina).

KEYWORDS:

• Financial inclusion
• financial institutions
• potential demand

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Retrieved February 17, 2020, from https://www.bancomundial.org/es/topic/financialinclusion/overview

² Retrieved February 17, 2020, fromhttp://www.bcra.gov.ar/SistemasFinancierosYdePagos/Politica_Financiera.asp#a

³ The survey does not include the locality of Cabildo or the surrounding rural areas. For more information, see Santos (2022).