There is a great consensus on the positive impact of credit access on farmers' incomes and consumption, however, its effect on income inequality among different population segments is still a controversial issue. The paper aims to examine these concerns through using the mixed data collected from the sample of 193 households surveyed (demand-side) and in-depth interviewees with the key credit providers (supply-side) in Lao Cai, the sixth poorest province in Vietnam. At the grass root level, it is evident that better credit access not only significantly positive influences on the effectiveness of agricultural production, but also is the driving force for better structural transition within cultivation versus livestock. Besides this, it enhances both on-farm and off-farm income as well as the well-being of rural households. At the community-impact level, surprisingly, the financial development without agriculture-related supports causes to the negative effect on the distribution of agricultural outcomes and prolongs the inequality in the locality. In addition, an alarm regarding latent social issues has been generating from the preferential credit screen under the community-based lending method. Finally, policy implications are discussed to enhance the effectiveness and outreach of credit in the locality.

Nowadays, the value chain financing (AVCF) is considered as an effective agricultural financing approach in the world, however, its prevalence is still limited in developing countries, like Viet Nam. This paper analyses the financial gap between the demands and the actual credit obtained of the Seng Cu (SC) rice chain participants in Lao Cai. Cross-sectional data were collected from 160 face-to-face interviews with SC rice producers and from in-depth interviews with 31 other stakeholders involved in the chain (demand-side) and the representatives of district-branch banks (supply-side) in 2016 - 2017. Overall, almost chain actors had high financial demands, especially upland rice producers and the leading chain actor (TPC). However, they faced many credit constraints related to the strict risk-avoidance strategy and the collateral requirement of banks. Even the SC rice chain confirmed its high potential and many supportive linkages among them developed, the decision-making of banks on credit disbursements still depends on the individual capability of each chain actors, not the entire chain.  Thus, the recommendations for policymakers, producers, and agribusiness are suggested to enhance the financial sources going in the chain and the effectiveness of chain actors in the locality.

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