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Determinants of household access to formal credit in the rural areas of the Mekong Delta, Vietnam

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  • Vuong Quoc, Duy
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    Abstract

    This paper investigates the factors affecting the access of rural individual and group-based households to formal credit in the Mekong Delta (MD), Vietnam. Poverty levels in the Mekong Delta have declined significantly over the last decades, but in the rural areas they remain significant. If it is assumed that access to credit is a suitable vehicle for poverty alleviation, it is necessary to assess the way households decide on borrowing. This paper identifies the determinants of the decision to borrow and of the amount that is borrowed by using the double hurdle model and the Heckman selection model. Data used in this paper were obtained from a survey of 325 rural households, conducted between May and October 2009. The results indicate that household capital endowments, marital status, family size, distance to the market centre, and location affect both the probability and the amount of asking for credit.

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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 38202.

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    Date of creation: 25 Mar 2012
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    Handle: RePEc:pra:mprapa:38202

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    Keywords: Formal credit; Double hurdle model; individual and group-based lending; rural households;

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    18. Francis Nathan Okurut, 2006. "Access to credit by the poor in South Africa: Evidence from Household Survey Data 1995 and 2000," Working Papers 13/2006, Stellenbosch University, Department of Economics.
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