Impact of microcredit on rural household welfare and economic growth in Vietnam

Thanh, Pham Tien; Saito, Katsuhiro; Duong, Pham Bao

doi:10.1016/j.jpolmod.2019.02.007

Cited by 34 publications

(33 citation statements)

References 28 publications

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“…It is believed that a frequent cause of market failure is limited access to working capital credit. Thus, creating and maintaining a well-functioning rural credit market is a prerequisite condition, first to correct market failures, and then to spur rural development in terms of economic growth and consumption smoothing (Duong and Izumida, 2002;Thanh et al, 2019).…”

Section: Introductionmentioning

confidence: 99%

Filling the voids left by the formal sector: informal borrowings by poor households in northern mountainous Vietnam

Thu

Duong

Thọ

2020

AFR

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PurposeThis study aims to examine the accessibility, loan purposes and effects of informal credits on poor households in Northern mountainous Vietnam.Design/methodology/approachThis study used primary data collected directly from surveying 402 poor households in Thai Nguyen province using a well-designed questionnaire. The probit model is employed to specify which factors affect access to informal credit, the tobit model is used to estimate the borrowing functions specified. In addition, descriptive statistical analysis is also used to describe the accessibility, purposes and effects of informal credit on poor households.FindingsThe results show that there is a considerably high proportion of informal borrowings from relatives, neighboring villagers, professional moneylenders, rotating saving and credit groups, trade credits and mortgages. Labor force ratio, social capital and residential land areas are the key determinants of poor households' informal borrowings. The purposes of borrowing are diverse. The informal loans also have certain significant effects on poverty reduction and the welfare of poor households.Research limitations/implicationsThe effects of the informal loans on house welfare should be quantitatively evaluated.Practical implicationsThe findings from these analyses allow us to draw relevant policy implications for the development of rural finance in other low-income, developing countries.Originality/valueThis research contributes to the body of published literature in several ways. Firstly, it provides understanding of the performance of the informal financial subsector. Secondly, the informal subsector of rural finance is evaluated in close relation to the formal subsector.

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Section: Introductionmentioning

confidence: 99%

Filling the voids left by the formal sector: informal borrowings by poor households in northern mountainous Vietnam

Thu

Duong

Thọ

2020

AFR

Self Cite

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“…Household characteristics included family size (number of family members), land size (ha), dependent ratio, informal credit and number of family members working in the public sector. These variables were considered as important covariates in assessing microcredit (Do and Bauer, 2016; Duong and Thanh, 2014; Khoi et al ., 2013; Li et al ., 2011; Pham and Izumida, 2002; Thanh et al ., 2019). Moreover, variables controlling for geographic location and village facilities were used by Li et al .…”

Section: Resultsmentioning

confidence: 99%

“…The criteria for choosing covariates, which drive household decision of participating in microcredit, were explained in detail in (Do and Bauer, 2016;Duong and Thanh, 2014;Khoi et al, 2013;Li et al, 2011;Pham and Izumida, 2002;Thanh et al, 2019). Moreover, variables controlling for geographic location and village facilities were used by Li et al (2011) and Pitt and Khandker (1998).…”

Section: Descriptive Statistics Of the Sampled Householdsmentioning

confidence: 99%

“…In Vietnam, there is growing interest in examining the impacts of microcredit on poverty reduction. Several studies have found significant effects of microcredit on rural households via increased income, expenditure, self-employment profit or mitigation of the effects of health shocks (see Do and Bauer, 2016;Thanh et al, 2019 for positive impacts on household income and/or household expenditure; see Lensink and Pham, 2012 for improved self-employment profit and see Thanh and Duong, 2017 for mitigation of health shocks). Moreover, considerable impacts on poor households in term of self-employment profits or household income and household expenditure have been found (Lensink and Pham, 2012;Phan et al, 2014).…”

Section: Introductionmentioning

confidence: 99%

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Does Microfinance Improve the Household Welfare of Ethnic Minorities? Evidence from Bac Kan Province, Vietnam

Goto

2020

Progress in Development Studies

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Although a large number of studies have investigated the impacts of microfinance on rural households, their effects on ethnic minorities, who are among the left-behind groups, have not been evaluated. This study examines whether microfinancing provided by the Vietnam Bank for Social Policies (VBSP) improves the household welfare of ethnic minorities living in northern mountainous regions of Vietnam. A stratified random sampling technique is applied to a sample of 289 households. Propensity score matching (PSM) is used to estimate the impacts of microfinance loans. Coarsened exact matching (CEM) is employed to verify the consistency of the PSM estimates. The results show positive and consistent impacts of microfinance loans on total expenditure per capita and educational expenditure per student, which supports the welfare effects of microfinance loans on ethnic minorities in northern mountainous areas of Vietnam.

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“…As per the statistical analysis for the period 1990-2016, total population grew by 38.6% while the per capita GDP grew by 301.8%indicating significant economic prosperity achieved by Vietnam during this period. Interestingly, Vietnam's annual GDP growth rate (averaged for the entire study period) was 6.8%-one of the highest in the world (Thanh et al 2019).…”

Section: Environmental Impacts Of Energy Consumption In Vietnammentioning

confidence: 99%

Decarbonization of Vietnam’s economy: decomposing the drivers for a low-carbon growth

Huong

Shah

Park

2020

Environ Sci Pollut Res

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Vietnam has witnessed a rapid increase in national-level CO 2 emissions due to rising urbanization, economic expansion, export growth, and industrial development. Moreover, to support the ambitious economic growth targets, reliance on and consumption of fossil fuels are increasing by each passing year. With this circumstance, this study aims to analyze the key drivers of CO 2 emissions in Vietnam from 1990 to 2016 using the Kaya identity and decomposition method. Following this approach, CO 2 emissions have been decomposed into five effect categories comprising population, affluence, energy intensity, fuel mix, and emission intensity. As per the results, CO 2 emissions in Vietnam were mainly driven by rising affluence (58.5%) and changing fuel mix (33.2%) which have resulted from improved living standards, rapid industrial development, and higher fossil fuel consumption. Moreover, population (13.8%) and emission intensity (3.1%) exhibited a relatively lower impact on CO 2 emissions during 1990-2016. However, energy intensity (− 8.7%) was the only negative driver which has resulted in the slowdown of carbon emissions in Vietnam. Based on the analysis of energy policy development, the share of renewable energy resources was still quite low in the national energy mix with higher reliance on traditional fossil fuels (mainly coal and petroleum). Therefore, to make a transition towards low-carbon economic growth, significant improvements in energy efficiency and emission intensity are necessary together with national energy mix restructuring for low-carbon economic growth.

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Impact of microcredit on rural household welfare and economic growth in Vietnam

Cited by 34 publications

References 28 publications

Filling the voids left by the formal sector: informal borrowings by poor households in northern mountainous Vietnam

Filling the voids left by the formal sector: informal borrowings by poor households in northern mountainous Vietnam

Does Microfinance Improve the Household Welfare of Ethnic Minorities? Evidence from Bac Kan Province, Vietnam

Decarbonization of Vietnam’s economy: decomposing the drivers for a low-carbon growth

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