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Rural Credit in Vietnam

Author

Listed:
  • Mikkel Barslund

    (Department of Economics, University of Copenhagen)

  • Finn Tarp

    (Department of Economics, University of Auckland)

Abstract

This paper uses a survey of 932 rural households to uncover how the rural credit market operates in four provinces of Vietnam. Households obtain credit through formal and informal lenders, but formal loans are almost entirely for production and asset accumulation. Interest rates fell from 1997 to 2002, reflecting increased market integration; but the determinants of formal and informal credit demand are distinct. Credit rationing depends on education and credit history, but we find no evidence of a bias against women. Regional differences are striking, and a ‘one size fits all’ approach to credit policy is clearly inappropriate.

Suggested Citation

  • Mikkel Barslund & Finn Tarp, 2006. "Rural Credit in Vietnam," Discussion Papers 06-03, University of Copenhagen. Department of Economics.
    • Handle: RePEc:kud:kuiedp:0603
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    File URL: http://www.econ.ku.dk/english/research/publications/wp/2006/0603.pdf/
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    References listed on IDEAS

    as
    1. Bao Duong, Pham & Izumida, Yoichi, 2002. "Rural Development Finance in Vietnam: A Microeconometric Analysis of Household Surveys," World Development, Elsevier, vol. 30(2), pages 319-335, February.
    2. Jean-Philippe Platteau, 1997. "Mutual insurance as an elusive concept in traditional rural communities," Journal of Development Studies, Taylor & Francis Journals, vol. 33(6), pages 764-796.
    3. Adam McCarty, 2001. "Microfinance in Vietnam - A Survey of Schemes and Issues," Finance 0110001, University Library of Munich, Germany.
    4. World Bank, 2003. "Vietnam Development Report 2004 : Poverty," World Bank Publications - Reports 14651, The World Bank Group.
    5. Kochar, Anjini, 1997. "An empirical investigation of rationing constraints in rural credit markets in India," Journal of Development Economics, Elsevier, vol. 53(2), pages 339-371, August.
    6. Zeller, Manfred, 1994. "Determinants of credit rationing: A study of informal lenders and formal credit groups in Madagascar," World Development, Elsevier, vol. 22(12), pages 1895-1907, December.
    7. Yadav, S. & Otsuka, K. & David, C. C., 1992. "Segmentation in rural financial markets: the case of Nepal," World Development, Elsevier, vol. 20(3), pages 423-436, March.
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    Citations

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    Cited by:

    1. Do Xuan Luan & Nguyen Thanh Vu & Kieu Thi Thu Huong & Duong Hang & Siegfried Bauer, 2016. "Is Access to Agribank Credit an Effective Tool in Improving Household Income? Evidence from the Northern Mountainous Region of Vietnam," Asian Social Science, Canadian Center of Science and Education, vol. 12(8), pages 110-110, August.
    2. Dang Thi Thu Hoai & Finn Tarp & Dirk van Seventer & Ho Cong Hoa., 2016. "Growth and structural transformation in Vietnam during the 2000s," WIDER Working Paper Series 108, World Institute for Development Economic Research (UNU-WIDER).
    3. Ayerst, Stephen & Brandt, Loren & Restuccia, Diego, 2020. "Market constraints, misallocation, and productivity in Vietnam agriculture," Food Policy, Elsevier, vol. 94(C).
    4. Long Qin & Ruoen Ren & Qinghai Li, 2018. "The Dual Threshold Limit of Financing and Formal Credit Availability with Chinese Rural Households: An Investigation Based on a Large Scale Survey," Sustainability, MDPI, vol. 10(10), pages 1-18, October.
    5. Tony Addison & Ville Pikkarainen & Risto Rönkkö & Finn Tarp, 2017. "Development and poverty in sub-Saharan Africa," WIDER Working Paper Series 169, World Institute for Development Economic Research (UNU-WIDER).
    6. Kati Schindler, 2010. "Credit for What? Informal Credit as a Coping Strategy of Market Women in Northern Ghana," Journal of Development Studies, Taylor & Francis Journals, vol. 46(2), pages 234-253.
    7. Finn Tarp, 2018. "Vietnam: The dragon that rose from the ashes," WIDER Working Paper Series 126, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    rural credit; household survey; Vietnam;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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