Outreach of credit institutes and households' access constraints to formal credit in Northern Vietnam

Dufhues, Thomas; Buchenrieder, Gertrud

Outreach of credit institutes and households' access constraints to formal credit in Northern Vietnam

dc.contributor.author	Dufhues, Thomas	de
dc.contributor.author	Buchenrieder, Gertrud	de
dc.date.accessioned	2024-04-08T08:37:29Z
dc.date.available	2024-04-08T08:37:29Z
dc.date.created	2005-08-18
dc.date.issued	2005
dc.description.abstract	Abstract Most policy and research interest regarding rural credit markets revolves around the perception that poor households in developing countries lack access to credit, which is believed to have negative consequences for household welfare. An important feature of the rural credit market is that access to credit is easier for some groups than for others. The Vietnamese government supplied credit on preferential terms, particularly to rural households, throug state-owned financial intermediaries. The share of the informal sector was thus considerably reduced from 78% (1992/93) of all outstanding loans to 54% (1997/98) in favor of the formal sector. However, there is evidence from other developing countries that credit constraints persist despite the expansion of rural finance. Hulme and Mosley (1996) state that there is increasing evidence that the poorest 20% of the population are excluded from rural credit programs. Thus, even in Vietnam the question remains: did the Vietnamese government succeed in reaching the poor, or do groups of people exist who are still access-constrained? Quantitative (N=260) and qualitative data collection took place between March 2000 and 2001. The quantitative data comprise cross-sectional household-level data from two different districts in Northern Vietnam. The poverty outreach of formal rural lenders was analyzed using Principal Component Analysis, while access to formal credit was investigated using a binary logit analysis. The poverty outreach of the formal lenders is quite satisfactory since about 50% of all predominantly poor rural households have access to formal credit. However, the poorest households are seldom clients of formal lenders. Yet, it is not their extreme general poverty that determines their access to formal credit. The results indicate that only certain aspects of poverty, e.g. low quality of housing, have an important influence on access to formal credit in Vietnam. The poorest households simply have much less demand for formal credit. Offering new credit products would only slightly improve the credit coverage of poorer households. More promising would be a specialized pro-poor extension service to widen the scope of their investment ideas and possibilities, combined with general improvement of the infrastructure. All in all, the most appropriate tool to incorporate poorer households into the formal financial system would be mobilization of savings. Nevertheless, the number of access-constrained households is surprisingly low. One reason for the low number is the weakening or eradication of former access constraints. Some acces barriers do still exist, e.g. towards ethnic minorities or female-led households. To reduce these access barriers, the actions to be taken should be catering to the specific needs and the circumstances of those households that lack access.	en
dc.identifier.swb	120461722
dc.identifier.uri	https://hohpublica.uni-hohenheim.de/handle/123456789/5029
dc.identifier.urn	urn:nbn:de:bsz:100-opus-1075
dc.language.iso	eng
dc.relation.ispartofseries	Forschung zur Entwicklungsökonomie und -politik / Research in development economics and policy; 2005,1
dc.rights.license	publ-ohne-pod	en
dc.rights.license	publ-ohne-pod	de
dc.rights.uri	http://opus.uni-hohenheim.de/doku/lic_ubh.php
dc.subject	North Vietnam	en
dc.subject	Credit market	en
dc.subject	Rural credit	en
dc.subject	Rural households	en
dc.subject	Poverty reduction	en
dc.subject.ddc	630
dc.subject.gnd	Nordvietnam	de
dc.subject.gnd	Kreditmarkt	de
dc.subject.gnd	Agrarkredit	de
dc.subject.gnd	Ländlicher Haushalt	de
dc.title	Outreach of credit institutes and households' access constraints to formal credit in Northern Vietnam	de
dc.type.dcmi	Text	de
dc.type.dini	WorkingPaper	de
local.access	uneingeschränkter Zugriff	en
local.access	uneingeschränkter Zugriff	de
local.bibliographicCitation.publisherPlace	Universität Hohenheim	de
local.export.bibtex	@techreport{Dufhues2005, url = {https://hohpublica.uni-hohenheim.de/handle/123456789/5029}, author = {Dufhues, Thomas and Buchenrieder, Gertrud}, title = {Outreach of credit institutes and households' access constraints to formal credit in Northern Vietnam}, year = {2005}, school = {Universität Hohenheim}, series = {Forschung zur Entwicklungsökonomie und -politik / Research in development economics and policy}, }
local.export.bibtexAuthor	Dufhues, Thomas and Buchenrieder, Gertrud
local.export.bibtexKey	Dufhues2005
local.export.bibtexType	@techreport
local.faculty.number	2	de
local.institute.number	490	de
local.opus.number	107
local.series.issueNumber	2005,1
local.series.title	Forschung zur Entwicklungsökonomie und -politik / Research in development economics and policy
local.university	Universität Hohenheim	de
local.university.faculty	Faculty of Agricultural Sciences	en
local.university.faculty	Fakultät Agrarwissenschaften	de
local.university.institute	Institute for Agricultural Economics and Social Sciences in the Tropics and Subtropics	en
local.university.institute	Institut für Agrar- und Sozialökonomie in den Tropen und Subtropen	de

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Institut für Tropische Agrarwissenschaften (Hans-Ruthenberg-Institut)
Forschung zur Entwicklungsökonomie und -politik / Research in development economics and policy