The impact of microfinance on poverty reduction in Vietnam: A dynamic panel‐data analysis

Abstract

The current study uses the Generalised Method of Moments to examine the dynamic relationship between access to microfinance and poverty reduction. The paneldata set is constructed from the Vietnam Household Living Standard Surveys during 2002-2008. The results show that access to microfinance in the previous period significantly improves per adult-equivalent income and consumption of the households in the current period.However, previous participation in microfinance programs is not sufficient to help households escape from poverty.In addition, both private and government bank loans significantly help improve household per adult-equivalent income, consumption, and poverty rates. The empirical results imply that a larger loan size, diversified loans for different consumption purposes, and improvement in infrastructure and facilities, especially in rural areas, are believed to help reduce poverty.

Role of Microfinance Institutions in Ethiopian Economy: A Review

“…Similar to arriving at similar con-clusions, there are instances in which study findings differ from one another or even run counter to one another. For example, outreach to the impoverished is positively correlated with sustainability and profitability indicators [7,12,16,[30][31][32]38]. Self-sufficiency and serving the poor are mutually exclusive.…”

“…Microfinance is also defined as providing loans, savings accounts, and other essential financial services to the impoverished. They also pointed out that microcredit, which is a key component of microfinance, is commonly understood to be the process of providing small, no-collateral loans to cooperative members who would not otherwise be able to obtain the funds needed to launch small businesses [8,14,16,18].…”

Comparative Impact of Formal and Informal Microcredits on Poverty Alleviation in the Haor Region of Bangladesh: A Socioeconomic Analysis

“…There are a number of studies [7][8][9][10][11] recognized the different ways and means of positive impact of micro credit on the borrowers in terms of increase by income, revenue, assets, food intake, donation, typical of living, social status, output in business and agriculture, prosperity, savings, mobilization of local economy, consumption, reduction of-cost and poverty, ensure sustainable finance [12,13], empowering women [14-18], affects economic development [19][20][21][22] and reducing income inequality [21,[23][24][25] among the borrowers.…”

Evaluating the impact of the government loan program on farms in Vietnam: An application of fuzzy regression discontinuity design

“…Accordingly, the formal financial system consists of traditional banks and financial institutions regulated by the State Bank of Vietnam, offering a wide range of loan products with different repayment terms and interest rates (Putzeys, 2002). However, accessing formal finance can be challenging for small-scale farmers and microenterprises due to strict lending requirements, collateral constraints, and high interest rates (Duong & Nghiem, 2022). While the informal finance system includes moneylenders, rotating savings and credit associations, and pawnshops that provide quick and easy access to credit but often charge high interest rates and rely on social collateral to secure loans, The semi-formal finance system includes MFIs that provide financial services to the underserved population, such as small farmers, microenterprises, and low-income households, through group-based lending and peer monitoring mechanisms.…”

“…It should be noted that agriculture constitutes a pivotal foundation for sustainable national development, especially in developing countries, as emphasized in prior literature. Nonetheless, studies conducted in Vietnam (Cuong, 2008; Duong & Nghiem, 2022) have exhibited a shortage of policy implications concerning the government's interventions in distorting market signals, as predicted by economists adhering to the Austrian or neoclassical schools. Consequently, owing to the selective nature of autocratic governmental media tools, discussions surrounding the development of the agricultural sector have predominantly centered on optimizing government policies rather than exploring alternative market‐based solutions (see also Van Le & Tran, 2022; Van Le et al, 2022).…”