Sustainable Development Poverty Reduction by Modeling and Simulation in Microfinance

  • Mohammed KaicerEmail author
Conference paper
Part of the Advances in Intelligent Systems and Computing book series (AISC, volume 1104)


In this paper we present some decision making tools for reducing poverty, by microfinance industry, in order to insure a sustainable development in many counties where the poverty is a real challenge. The services offered by the Microfinance Institutions MFIs, especially microcredit, are for the population that has no real substantive safeguards that allow them access to traditional financial services. This lack of safeguards which illustrates a shape of the asymmetric information it generates higher risk products. The MFI offers two types of contracts, individual lending and group lending, characterized by some parameters. The most important are the interest rate and joint liability in group lending. The characteristic of the latter is that each borrower declares reimburse shares of its defaulting partners and the decision to repay depends on the whole group. As for the individual loan, the decision is up to the single borrower. In this paper we present the techniques of modeling and simulation of some optimization problems in microfinance. We will give the fundamental aspects for the design of a financial contract, to minimize the risk of non-repayment linked to the random behavior of micro-borrowers.


Sustainable development Mathematical modeling Microfinance Poverty reduction Risk of non repayment Financial inclusion 


  1. 1.
    Kaicer, M., Aboulaich, R.: Econometrics analysis of the failure in group lending. Int. Innov. Appl. Stud. 5, 106–114 (2014)Google Scholar
  2. 2.
    Kaicer, M.: Modélisation et simulation, outils d’aide à la décision en microcrédit. Ph.D. thesis en sciences et technique de l’ingénieur EMI, Mohammed 5 univ. Rabat, Morocco (2014)Google Scholar
  3. 3.
    Aghion, B.A., Morduch, J.: The Economics of Microfinance. MIT Press, Cambridge (2007)Google Scholar
  4. 4.
    Besley, T., Coate, S.: Group lending, repayment incentives and social collateral. J. Dev. Econ. 46, 1–18 (1995)CrossRefGoogle Scholar
  5. 5.
    Bourjade, S., Schindele, I.: Group lending with endogenous group size. Econ. Lett. 117, 556–560 (2012)MathSciNetCrossRefGoogle Scholar
  6. 6.
    Bhole, B., Ogden, S.: Group lending and individual lending with strategic default. J. Dev. Econ. 91, 348–363 (2010)CrossRefGoogle Scholar
  7. 7.
    Ghatak, M.: Group lending, local information and peer selection. J. Dev. Econ. 60, 27–50 (1999)CrossRefGoogle Scholar
  8. 8.
    Tedeschi, G.: Here today, gone tomorrow: can dynamic incentives make microfinance more flexible? J. Dev. Econ. 80, 84–105 (2006)CrossRefGoogle Scholar
  9. 9.
    Nations unies: Objectifs du Millénaire pour le développement (Rapport 2015)Google Scholar
  10. 10.
    Aboulaich, R., Kaicer, M., Habbal, A.: Model with cycles for refinancing individual lending in microcredit. Int. Res. J. Financ. Econ. 118, 1450–2887 (2014)Google Scholar
  11. 11.
  12. 12.
    Ab Rahman, N.A., Hassan, S., Said, J.: Promoting sustainability of microfinance via innovation risk, best practices and management accounting practices. In: International Accounting and Business Conferences (2015). Procedia Economics and Finance 31, 470–484 (2015)Google Scholar
  13. 13.
    Kauffman, R.J., Riggins, F.J.: Information and communication technology and the sustainability of microfinance. Electron. Commer. Res. Appl. 11, 450–468 (2012)CrossRefGoogle Scholar
  14. 14.
    García-Pérez, I., Muñoz-Torres, M.-J., Fernández-Izquierdo, M.-Á.: Microfinance literature: a sustainability level perspective survey. J. Clean. Prod. 142, 3382–3395 (2017)Google Scholar
  15. 15.
    Kiendrebeogo, Y., Assimaidou, K., Tall, A.: Social protection for poverty reduction in times of crisis. J. Policy Model. 39, 1163–1183 (2017)CrossRefGoogle Scholar
  16. 16.
    Donou-Adonsou, F., Sylwester, K.: Growth effect of banks and microfinance: evidence from developing countries. Q. Rev. Econ. Financ. 64, 44–56 (2017)CrossRefGoogle Scholar
  17. 17.
    Neaime, S., Gaysset, I.: Financial inclusion and stability in MENA: evidence from poverty and inequality. Financ. Res. Lett. 24, 230–237 (2018)CrossRefGoogle Scholar
  18. 18.
    Liñares-Zegarra, J., Wilson, J.O.S.: The size and growth of microfinance institutions. Br. Account. Rev. 50, 199–213 (2018)CrossRefGoogle Scholar
  19. 19.

Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  1. 1.Informatics, Systems and Optimization LaboratoryIbn Tofail UniversityKenitraMorocco

Personalised recommendations