Empirical Estimation of Loans Demand Function for Microfinance Organization’s Regular Сonsumers

Microfinance is a young and actively growing sphere in Russia, however, native researchers do not pay much attention to this market. This paper is going to fill this gap and its objective is an empirical estimation of the demand for microloans from the direction of organization’s regular borrowers. The data from one microfinance company, that operates in the Internet and supplies clients around almost all Russian regions, is used here. Cross-sectional data includes loans, which were given from middle 2012 to the end of 2014. The Heckman’s model was used in the estimation, as it allows taking into account both factors that influence on the quantity demanded, and on the decision about taking recurrent microloan. The main results are: estimated demand function and calculated elasticities with respect to interest rate (-0,49) and maturity (0,13). These results are useful for the observable company from the practical side. They also may be helpful for its competitors, as they show special features of the demand on the loan market.