The Palestinian Economy. Theoretical and Practical Challenges

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Di Martino – Sarsour
for micro credit depends, in theory, on the number of such potential clients, but also on
the extent to which ordinary banks are or are not interested in this market.
To determine the dimension of the potential market for micro credit, a mainstream
approach consists in dividing the active population into groups depending on their
income. Visually this approach can be represented by the pyramidal graph 1 below.
Various segments of the market can be described as:
A: rich individual who are served by ordinary financial institutions and are not
interested in microfinance loans;
B: relatively affluent individuals (or at least above the poverty line) who might or
might not have alternatives to microfinance institutions depending on banks’ approach;
C: poor individuals who are classified below the poverty line but still having saving
capacity; this is usually the main target for microfinance institutions;
D: individuals who are just above the classification of “poorest of the poor” and still
have some level of saving capacity;
E: the poorest of the poor, with no saving capacity at all.