• The Journal of Asian Finance, Economics and Business
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• v.7 no.5
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• pp.119-130
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• 2020

The study seeks to evaluate the impacts of three types of credit - formal, semi-formal, and informal credits - on the well-being of households in Vietnam's rural areas. Based on data from the Vietnam Household Living Standard Surveys in 2014 and 2016, the research uses the instrumental variable fixed-effect models to estimate the effects of three kinds of credit on household's per capita income and expenditure. There are some significant findings. First, in rural areas, formal credit is the most popular source with stable and cheap borrowing costs. Informal credit is a complement to formal credit to meet urgent needs. Funding agriculture activities is the most commonly cited purpose of borrowing, followed by purchasing assets. The highest misuse rate belongs to the group of loans for agriculture production. Second, the results show that credit helps smoothen consumption rather than generate income for rural households. Three types of credit have insignificant or negative effects on household's per capita income. Formal loans significantly improve total expenditure and spending on healthcare and education. Informal and semi-formal credits show a little influence on consumption. Informal loans have a significantly positive effect on healthcare expenditure. In contrast, having semi-formal loans tends to decrease spending on foods.

• Asian Journal of Business Environment
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• v.3 no.1
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• pp.5-16
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• 2013

Purpose - Micro-finance institutions (MFIs) are critical to Vietnam's quest for poverty alleviation among the poor in the rural and agrarian communities. The current study attempts to investigate the impact of microfinance outreach programs undertaken by formal and semi-formal MFIs in Vietnam targeting the poor rural and agrarian communities. Research design, data, methodology - An enquiry was made as to whether the poor and rural communities accessed the micro credit offered by Government supported MFIs and NGOs through their microfinance outreach programs. Furthermore, the current study attempted to explore if the current mode of operations adopted by MFIs in Vietnam is sustainable. Results -The findings indicate that significant progress has been made in Vietnam to alleviate poverty among the poor rural communities through micro finance outreach programs. Conclusions - There are also pointers of MFIs sustainability in Vietnam. However, it still remains to be seen if the current sustainability pointers are long lasting without government subsidies or some international organizations financial support to microfinance outreach programs.