Poverty Targeting and Impact of a Governmental Micro-Credit Program in Vietnam

Poverty and Economic Policy Research Network Working Paper No. PMMA-2007-29

34 Pages Posted: 29 Sep 2009  

Cuong Viet Nguyen

(NEU) National Economics University of Vietnam

Minh Thu Pham

(NEU) National Economics University of Vietnam

Nguyet Pham Minh

(NEU) National Economics University of Vietnam

Date Written: December 15, 2007

Abstract

It is argued that without collateral the poor often face binding borrowing constraints in the formal credit market. This justifies a micro-credit program, which is operated by the Vietnam Bank for Social Policies to provide the poor with preferential credit. This paper examines poverty targeting and impact of the micro-credit program. It is found that the program is not very pro-poor in terms of targeting. Among the participants, the non-poor account for a larger proportion of loans. The non-poor also tend to receive larger amounts of credit compared to the poor. However, the program has positive impact on poverty reduction of the participants. This positive impact is found for all the three Foster-Greer-Thorbecke poverty measures.

Keywords: Micro-credit, poverty, poverty targeting, impact evaluation, instrumental variables, fixed-effect model

JEL Classification: I32, I38, H43, H81

Suggested Citation

Nguyen, Cuong Viet and Pham, Minh Thu and Pham Minh, Nguyet, Poverty Targeting and Impact of a Governmental Micro-Credit Program in Vietnam (December 15, 2007). Poverty and Economic Policy Research Network Working Paper No. PMMA-2007-29. Available at SSRN: https://ssrn.com/abstract=1479791 or http://dx.doi.org/10.2139/ssrn.1479791

Cuong Nguyen Viet (Contact Author)

(NEU) National Economics University of Vietnam ( email )

207 Giai phong Road
Hai Ba Trung District
Hanoi, Hanoi 10000
Vietnam

Minh Thu Pham

(NEU) National Economics University of Vietnam

207 Giai phong Road
Hai Ba Trung District
Hanoi, Hanoi 10000
Vietnam

Nguyet Pham Minh

(NEU) National Economics University of Vietnam

207 Giai phong Road
Hai Ba Trung District
Hanoi, Hanoi 10000
Vietnam

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