The dynamic game of risk default in microcredit

Abstract

In this paper we present a new approach to solve a risk default, under asymmetric information, between Micorfinance Institutions MFIs and borrowers excluded from the conventional financial systems (financial exlusion). To solve this problem we propose the model, as a system of two differential equations to describe the evolution of some safe and risky borrowers. In fact, the population of borrowers is divided into two compartments: Safe and Risky having an interaction, it is a SR model. With numerical simulations of the SR model, we can describe the evolution of some safe and risky borrowers. The result provides to manage the portfolios of all agencies controlled from the MFIs, by predictions of safe and risky borrowers. Then, define or redefine the management strategies of development and investment, and thus strengthen financial inclusion.