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Determinant of Access to Rural Credit and Its Effect on Living Standard: Case Study about Poor Households in Northwest, Vietnam

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  • Tran Thi Thanh Tu
  • Nguyen Quoc Viet
  • Hoang Huu Loi

Abstract

This study investigated the determinants of accessibility to formal credit and its effects on living standards from 2010 to 2012 based on dataset of Vietnam Households Living Standards Survey (VHLSS) from the General Statistics Office of Vietnam and support of Eview 7 program. It is evident that average of education level, land area per capita, owned residential area affect is key factors of accessing to credit; meanwhile, average of education level affects the probability to require and amount of credit. Interestingly, we find that poor recognize by local and rate of non-farm income is positive factor of accessibility on formal credit; in addition, interest rate has statistically significant, implying has impact on loan amount. In otherwise, by using DID (Note 2) approach and OLS (Note 3) model for analyzing panel dataset in 2010, 2012; we find that have only impact of accessing to loan on education expense in short-term. Next, the results also indicate that enhance education level and rate of non-agriculture income lead to achievement of living standards.

Suggested Citation

  • Tran Thi Thanh Tu & Nguyen Quoc Viet & Hoang Huu Loi, 2015. "Determinant of Access to Rural Credit and Its Effect on Living Standard: Case Study about Poor Households in Northwest, Vietnam," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 6(2), pages 218-230, April.
    • Handle: RePEc:jfr:ijfr11:v:6:y:2015:i:2:p:218-230
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    2. Martinson Ankrah Twumasi & Yuansheng Jiang & Evans B. Ntiamoah & Selorm Akaba & Kwabena N. Darfor & Linda K. Boateng, 2022. "Access to credit and farmland abandonment nexus: The case of rural Ghana," Natural Resources Forum, Blackwell Publishing, vol. 46(1), pages 3-20, February.
    3. Yusuf Ibrahim Kofarmata & Shri Dewi Applanaidu & Sallahuddin Hassan, 2016. "Determinants of Demand for Credit: A Conceptual Review," Asian Journal of Economics and Empirical Research, Asian Online Journal Publishing Group, vol. 3(1), pages 6-10.

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