Geographical Distance and Access to Bank Credit of Vietnamese Farmers

Khuong Ninh Le () and Van Hon Cao
Additional contact information
Khuong Ninh Le: Can Tho University, Vietnam
Van Hon Cao: An Giang University and National University of Ho Chi Minh City, Vietnam

Journal of Economic Development, 2023, vol. 48, issue 1, 111-128

Abstract: This paper estimates the impact of bank-borrower geographical distance on the access of farming households using a primary dataset on 1,234 rice farming households in Vietnam. Despite tremendous progress in the internet and telecommunication infrastructures for e-banking that helps relieve information asymmetry and transaction costs, the geographical distance still negatively affects the access of farming households to bank credit. Moreover, the distance from their locations to the nearest provincial roads aggravates this effect. We also find that collateral and the length of credit relationships relieve the adverse restraints on their access to bank credit, as do family members who are bank officers or rice traders or are friends of those agents. The main findings of this paper point to the importance of banks expanding their branch networks and the conversion of local roads to provincial roads by the government in terms of enhancing rice farming households’ access to bank credit.

Keywords: Bank Credit; Collateral; Farmer; Geographical Distance; Information Asymmetry; Vietnam (search for similar items in EconPapers)
JEL-codes: G00 G20 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://jed.cau.ac.kr/archives/48-1/48-1-5.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:jecdev:0053

Access Statistics for this article

Journal of Economic Development is currently edited by Sung Y. Park

More articles in Journal of Economic Development from The Economic Research Institute, Chung-Ang University Room 1040, Building 310, Chung-Ang University, 84 Heukseok-ro, Dongjak-gu, Seoul 06974, South Korea. Contact information at EDIRC.
Bibliographic data for series maintained by Tram Nguyen ().