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Longitudinal analysis of microfinance borrowers in Brazil: A dynamic market segmentation

Lucas Lopes Ferreira de Souza, Francesca Bassi and Ana Augusta Ferreira de Freitas

Journal of International Development, 2021, vol. 33, issue 6, 1063-1083

Abstract: 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.

Date: 2021
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Handle: RePEc:wly:jintdv:v:33:y:2021:i:6:p:1063-1083