The housing credit as well as the productive credit, increase employment, investment, productivity and the long term growth rate of the economy, and under certain conditions, contributes to alleviating poverty. This is because access to credit promotes equality of opportunities, smoothes the consumption over time and allows the reallocation of resources to more efficient uses. In this sense, microfinance has proven to be an effective mechanism of poverty reduction and for promotion of social inclusion, although it has not been a sufficient condition to achieve those objectives.
 
As known, the lower income workers hold more precarious and unstable jobs, have no collateral, and have greater vulnerability to inflation and other conditions of macroeconomic instability. That why they may be credit rationed due to these drawbacks and to market imperfections that affect both supply and demand.
 
From Argentina’s perspective, comparing the recent experience with the one of other countries in the region, we find that local microfinance sector is underdeveloped and limited to microcredit. This featured is motivated by the existence of certain obstacles. Among these hurdles there are: market failures associated with asymmetric information, insufficient or lack of funding for institutions that provide microcredit, the discriminatory tax treatment to informal micro-borrowers, relatively high labor costs faced by microfinance institutions, the little or none regulation of entities operating in the sector, lack of collateral or guarantees, and high operating costs incurred by microfinance institutions (hereinafter MFI) to monitor the loans.
 
To our knowledge, the information about the true size of the argentine microfinance market is scant or non-existent, due to a limited knowledge of the demand among other reasons. Although previous studies attempted to provide estimates about this demand, they are outdated, have been discontinued in time or suffer from some methodological shortcomings. In this sense, a central problem of the microfinance market in Argentina is the failure of MFIs to expand and reach out their demand. And that is due precisely to the limited knowledge about the actual and particularly the potential demand they face.
 
In our paper, we try to fill that gap in the literature and based on household surveys[1] we estimate the determinants of the probability of prospective microcredit demand. More specifically, we quantify, characterize and enquire about the extent in which urban households socio-economic and demographic characteristics influence in people’s propensity to ask for a microcredit, either for productive purpose or housing.
 
We contribute to the literature on financial inclusion and microfinance in developing countries in at least three respects: First, It is the first study on the determinants of the prospective demand for microcredit in Argentina using binary econometric estimation techniques (Logit). Second, we explain the prospective behavior of such demand in contrast to the overwhelming amount of literature that focuses on past demand or a broader access to financial services, including microcredit. And third, we separate out potential demand for productive microcredit from housing microcredit, unlike previous literature. The latter is based on the vast unmet demand for housing microfinance observed in Argentina.
 
We arrived at the following conclusions:
 
• We found a total of 2.080.187 individuals earning two or less minimum wages (i.e. the potential demand) that would "request a housing loan, consumption or a productive venture in the next 12 months”. From these individuals, 10% are unemployed, 45% are informal employees and 45% are formal employees.
 
• The potential demand is highly concentrated: 53% of it is located in the Greater Buenos Aires area. That proportion goes up to 77 % when including the urban areas of Córdoba, Rosario and Tucuman.
 
• The proportion of potential applicants for microcredit with access to banking services does not exceed 40%.
 
• Most of the potential applicants for housing credit are already owners (57%) living in houses (86%). The use of microcredit, in perspective, we conjecture would serve to expand or renovate an existing home or building "social" housing in the best of cases.
 
• Through our econometric estimation, we found that the main factor determining whether the person would request a microcredit next year is the occupation (if the person is employed and the type of employment). In this sense, the hypothesis that the greater the informality of the current occupation, the greater the probability of seeking a productive microcredit was confirmed.
 
• The propensity to apply for a microcredit is independent of the educational level attained by the respondent of the survey and age is positively related to the probability of applying for a microcredit although decreasing mode when the life cycle progresses.
 
• At the same time, we note that the purpose of microcredit is essential to understand the demand. For instance, women show less marginal propensity to apply for productive microcredits than men, counterintuitive of the popular belief about "social micro-entrepreneurial woman".
 
• Last, the fact that the person has applied for and obtained a loan the previous year is related to the propensity to borrow next year. However, this result is consistent with the pattern of demand for housing credit, not that of demand for productive purposes.
 
Based on the results of this research, one final corollary will be that policies of encourage or access to microcredit must be differentiated according to kind of loan. Particularly for Argentina should contemplate the local appetite to repair, expand or finish a house in order to improve living conditions and social welfare accordingly.
 

[1] Based on the data gathered from Social Debt Survey of the Catholic University Argentina 2011, a stratified sample of 5.713 housing in urban areas across the country
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Bibliography
Carballo, I.; Grandes, M. y Molouny, L. (2016). Determinantes de la demanda potencial de microcrédito en Argentina. Cuadernos de Administración, 29 (52), 199-228. http://dx.doi.org/10.11144/ Javeriana.cao29-52.cddp
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Conditional Cash Transfers (CCTs) have been an essential tool for public policy in its fight against poverty, and the trend has been for an increasing number of programs, geographic coverage, number of beneficiaries, and funding.
 
Currently, there are 25 CCT programs operating in 19 countries across the region. These programs have evolved since the first days of CCTs, exploring different delivery methodologies in order to meet the specific needs and contexts of each country. Many of the 25 programs combine different payments modalities, from cash or paycheck distribution to the opening of bank accounts.
 
There’s been a tendency towards payment methods that are more efficient and inclusive, either by linking to the financial sector or through the use of new technologies. However, cash and checks still persist in 12 of the programs - especially in the case of remote areas or areas that lack infrastructure and services - and only a small  number of programs offer full access to a wide range of financial services.
 
But beyond delivery methodology, some other barriers still limit the financial inclusion of the CCT recipients. Many recipients withdraw all the money as soon as they receive the transfer, which can also lead to a lack of liquidity in the ATMs. There’s also a tangible lack of trust towards the financial system, related to the low quality of customer service and care. In order to address all this, a good communication and the development of financial capabilities is essential.
 
In spite of these difficulties, the fact of being linked to a financial institution can still increase the possibilities for the recipient of accessing new financial services, or at least help them to discover and get to know new products. Therefore, it can be expected that, in general, CCTs delivered through bank accounts can incentivize formal savings in the long run and, to a certain extent, also promote financial inclusion.
 
Consistently, though there are few programs using bank accounts with widespread availability, many economies have incorporated some of the dimensions of financial inclusion into their CCT programs, advancing saving or mobile banking. For all this, we believe that CCTs have contributed to advancing financial inclusion in the Latin American region.
 
To date, there exists much empirical evidence about the short term impact of CCTs on poverty, consumption, health, child development, and the general well-being of recipients. There also exist a large number of empirical studies analyzing financial inclusion, and its positive effects on the economy. However, the majority of studies that analyze the relationship between financial inclusion and CCTs have been theoretical or based in microeconomics, focused on the impact of particular programs on specific economies. The current investigation constitutes an alternative to the lack of macroeconomic studies, and is based in a comparative review of the financial inclusion data of 16 Latin American countries from 2000 to 2013.
 
It is particularly difficult to evaluate financial inclusion in Latin America for two reasons; the limited information available to fill the gaps in information, and the lack of consensus regarding which variable or indicator is best suited to represent the complexity of financial inclusion.
 
With respect to the second point, the literature usually studies financial inclusion in a multidimensional manner, with the dimensions commonly relating to access, use, and depth of the financial sector. However, variables such as barriers to access and quality of the financial system are now being incorporated more and more.
 
With respect to the traditional dimensions of use of and access to the financial system, the number of bank accounts, bank branches and ATMS per resident are frequently used as a variable proxy, while penetration of the financial systems is frequently measured via the ratio of private credit to the GDP of a specific economy.  Given that there is are gaps in the information for all years of the variables to access and use in Latin America, for our work we used the ratio of private loans to GDP.
 
Although the measure is far from perfect (credit could be concentrated in the hands of a few large borrowers, implying a deep financial sectors but one where access or use is scarce), this is the only variable currently available for a study of this type and it is highly correlated with the variables of use and access in our sample. CCTs were chosen as an independent variable, measured in monetary flow injected by the conditional transfer programs in different countries in the sample were taken. Control variables such as education, poverty, income, population and inequality were also introduced.
 
The primary result of the investigation showed that the impact of the principal independent variable was positive and statistically significant in all models, whether working with the amount assigned in the annual budget or the amount actually executed each year. This corroborates the hypothesis that a higher rate of CCTs is related to a greater rate of financial inclusion. Moreover, the analysis suggests that the impact would be even greater if the number of CCTs in the region offering financial services was increased.
 
It should be noted that the information available on CCT programs in the region is still very limited. For this reason, our results are presented as a first pass that should be furthered with  future research, when more data are available and further study can be done based on larger sample sizes.
 
Equally, these results do not purport to confirm that simply offering financial services linked to CCTs is sufficient to increase financial inclusion. As mentioned, the mere fact of access to financial services, without the necessary financial education to make effective use of them, is a barrier to financial inclusion. As such, measurements of access and training should be considered as part of future CCTs programs.
 
Finally, the latest publications by Global Findex note that, though the number of individuals with a bank account is increasing around the world, it appears that a large proportion of these accounts are not being used. This important number - of bank accounts that are empty or show no activity - raises serious questions about the effectiveness of the financial inclusion of users. In this sense, the levels of financial inclusion measured by the variable of use would be misleading and only reflect an increase in the number of bank accounts.
 
To overcome these biases of information, different multidimensional indicators of financial inclusion have recently begun to be developed. However, for the moment, these new measures suffer from discontinuity in their publications or lack of a larger body of research. Therefore, studies on the impact of CCTs according to these indicators will have to wait until information on these figures over a longer time is available.
 
 
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