This brief addresses demand for microcredit only, not demand for microfinance or othermicrofinance services, such as savings or funds transfers,which may be greater than the demand for micro credit. Forinstance, the ratio of savers to borrowers is about 10-to-1for Bank Rakyat Indonesia, 9-to-1 for Centenary Bank inUganda, and 4-to-1 for PRODEM in Bolivia (MIX Market). Microcredit demand estimates address the amount of fundingrequired: the expected number of active borrowers ismultiplied by an assumed average outstanding loan amount.Reasonable estimates of average loan size can be derivedfrom international databases maintained by the mix marketand micro credit summit. But estimating numbers of expectedborrowers can be a minefield. This brief discusses the kindsof reductions that should be factored into a demand estimateand looks at some all too-sketchy empirical evidence aboutthe size of those reductions. Most-but not all-of thisevidence raises a concern that demand may often beoverestimated by a considerable margin.
PDF
download
878987797
028-85220240
