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Does the microcredit intervention change the life of the low- and middle-income households in rural Vietnam? Evidence from panel data

Nguyen Dinh Dao

World Development Perspectives, 2020, vol. 20, issue C

Abstract: Existing studies have shown the important role of microcredit on poverty reduction, especially in developing countries like Vietnam. Although most studies conclude the positive impact of microcredit participation on poverty reduction through income generation, there remain mixed results. Besides, there has been limited research done on children’s education in Vietnam. This study is to measure the impact of the microcredit programme of the Vietnam Bank for Social Policies (VBSP) on poverty reduction (via income indicators) and children’s education (via the shares of kids and teenagers in school) of the poor- and middle-income households in rural Vietnam. The paper uses a set of econometric methods for static and dynamic analysis. The static models conclude that VBSP’s microcredit had significantly positive impacts on agricultural income per capita and significantly negative impacts on the total income per capita. The figures for non-farm non-wage income per capita and indicators of children’s schooling are not statistically significant. Moreover, the dynamic models indicate that the long-term impacts of microcredit on the selected outcomes are insignificant. From the estimated results, the study also suggests some policy implications.

Keywords: Microcredit participation; Rural Vietnam; Panel data; Static; Dynamic; Long-term impact (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.wdp.2020.100259

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