ASSESSMENT OF THE SUSTAINABILITY OF A MICROCREDIT INSTITUTION VIA FINANCIAL MODELING

Abstract

It is important for a microcredit institution, which has the strategic objectives of growth, self-sustainability and social access function, to have ways to assess tradeoffs and to test possible future settings. These objectives are interdependent and any change in one of them will affect the others. The purpose of this paper is to determine the degree of sustainability of a Brazilian microcredit institution considering two situations: a constant demand and an increasing demand. In order to become it possible a simulation model was developed. The model has reproduced loans and payments done by the fund during the period of one year. The simulation process allowed us to estimate the revenue values and the operational results during the analyzed period. The results of the study show a situation of faint sustainability for both settings and lower operational results for the organization when compared with its goals.