Strategies of Determination of the Factors of Decision of the Borrowers of Microcredit

by Fátima Barbosa, Lucia de

Abstract (Summary)
This study sought to develop mechanisms capable of classifying an individual as user or nonuser of microfinance starting from the determination of the factors that influence a decision for a given type of microfinance, and in the case of microfinance users, to preventively identify the potential for attrition, with full applicability at any moment in time. In practice, itis noteworthy that that the decisions of a potential microcredit user stem from his or her broader personal characteristics. Empirically, the entrepreneur generates an analysis of the conditions of his or her microenterprise and the viability of meeting his or her business requirements and links this back to the terms of the microfinance service. From this perspective, hoping to simulate the conditionality behind becoming or remaining amicrocredit user, this study generated three specific logistical models. Models 1 and 2, based on multinomial regression, sought to identify the decisive factors for an individual to be a microcredit user, based on his or her personal characteristics and the characteristics of themicrobusiness, respectively. Model 3, based on binary regression, attempted to estimate the probability of the individual to desist using microfinance services, based on the terms of the microfinance as well as the characteristics of the microbusiness. The use of three models in different processes was justified as the pretense of formulating simple models and of easy practical application. The results concluded that entrepreneurial results-oriented microbusiness proprietors look to expand their businesses and view microcredit as aninstrument for this goal. This work will contribute to the awakening of a new examination of the conceptual roots of how microcredit is structured and to shift the role of microcredit towards a function for improving the administration of micro businesses.
This document abstract is also available in Portuguese.
Bibliographical Information:

Advisor:Antônio Lisboa Teles da Rosa; Ronaldo de Albuquerque e Arraes

School:Universidade Federal do Ceará

School Location:Brazil

Source Type:Master's Thesis

Keywords:Informal Sector Supply and Demand Microcredit RegressionLogistics.


Date of Publication:05/09/2007

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