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

PEP Working Paper Serie 2007-29

34 Pages Posted: 2 May 2018 Last revised: 13 Jul 2018

See all articles by Cuong Viet Nguyen

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

Duong Toan

(NEU) National Economics University of Vietnam

Date Written: December 1, 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

Suggested Citation

Nguyen, Cuong Viet and Pham, Minh Thu and Pham Minh, Nguyet and Toan, Duong, Poverty Targeting and Impact of a Governmental Micro-Credit Program in Vietnam (December 1, 2007). PEP Working Paper Serie 2007-29. Available at SSRN: https://ssrn.com/abstract=3171620 or http://dx.doi.org/10.2139/ssrn.3171620

Cuong Viet Nguyen (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 ( email )

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

Nguyet Pham Minh

(NEU) National Economics University of Vietnam ( email )

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

Duong Toan

(NEU) National Economics University of Vietnam ( email )

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

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