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

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