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Longitudinal analysis of microfinance borrowers in Brazil: A dynamic market segmentation
Author(s) -
Souza Lucas Lopes Ferreira,
Bassi Francesca,
Freitas Ana Augusta Ferreira
Publication year - 2021
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.3561
Subject(s) - microfinance , market segmentation , context (archaeology) , segmentation , business , economics , marketing , economic growth , geography , archaeology , artificial intelligence , computer science
This study uses a dynamic modelling approach to group clients of a microcredit programme in Brazil and follows them over time. Five segments are identified based on variables related to business, owners, families and operations performed within the programme. Results show that borrowers' circumstances are diverse and different actions are needed for each group. Many customers remained in the same segment; some moved to segments with worse conditions. However, the fact that one fourth of borrowers improved conditions is promising, considering the risky nature of entrepreneurial activity and the Brazilian economic context. Our analyses show that mission drift does not occur.