Correction of the Claim for Microfinance Market of 1.5 Billion Clients

Abstract

Since the beginnings of modern microfinance in the 70s, the industry continued to grow rapidly, albeit fueled by dubious assumptions related to market potential. Boosted by Nobel Prize award, thousands of new MFIs are currently being created in the lure of market potential, estimated at one and half billion of unattended clients. The estimates, however, differ drastically and there is no wide scale assessment available deducing the unattainable market strata, detrimental to sustainable microfinance, from the inflated estimates. The exaggerations are to be denoted as unrealistic and excluded from the global estimates. This study intends to quantify the market wrongly assumed to form part of the microfinance market and to deduce the real size of the potential global microfinance sector, appraising the size of the market that should not be counted into the integral demand, since it is unsustainable or harmful to the players involved.