Microcredit and Household Welfare: Evidence from Vietnam Bank for Social Policies

Posted: 21 Feb 2019

See all articles by Booyuel Kim

Booyuel Kim

KDI School of Public Policy and Management

Trinh Pham

KDI School of Public Policy and Management

Date Written: December 1, 2018

Abstract

This paper evaluates how governmental microcredit affects rural households in Vietnam using panel data obtained from Vietnam Household Living Standards Surveys 2010, 2012, 2014. Employing household fixed-effects with instrumental variable, the results show that the Vietnam Bank for Social Policies (VBSP) microcredit program has no significant impact on total income of household. Decomposing the total income into smaller components, we find significant and positive impacts of microcredit on profits from farming activities, whereas insignificant impacts are found on such other components as income from wage and income profits from non-farming activities. The findings also show positive, significant impacts on total household expenditure, food consumption and spending on health care.

Keywords: microcredit, impact evaluation, Vietnam

JEL Classification: G21, O16, O18

Suggested Citation

Kim, Booyuel and Pham, Trinh, Microcredit and Household Welfare: Evidence from Vietnam Bank for Social Policies (December 1, 2018). KDI School of Pub Policy & Management Paper, Available at SSRN: https://ssrn.com/abstract=3336382

Booyuel Kim (Contact Author)

KDI School of Public Policy and Management ( email )

P.O. Box 184
Seoul, 130-868
Korea, Republic of (South Korea)

Trinh Pham

KDI School of Public Policy and Management ( email )

263 Namsejong-ro
Sejong-si 30149
Korea, Republic of (South Korea)

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