Socio-economic Impact of Rural Credit in Northern Vietnam: Does It Differ between Clients Belonging to the Ethnic Majority and the Minorities?

  •  Tran Thi Thanh Tu    
  •  Nguyen Phu Ha    
  •  Tran Thi Hoang Yen    


The paper evaluates the impact of rural credit program on socio-economic development with emphasis on two classifications of clients at household level: the majority and the ethnic minorities in Vietnam. Our paper utilizes the regression analysis of survey data collected in 10 provinces from the North to the South of Vietnam. The analysis reveals that rural credit poses positive impacts on Vietnamese population living in both rural and remote areas. More specifically, an increased VND 1 million of loan would raise the income by VND 0.249 million. At the same time, it would contribute annually to create 1.548 jobs. Besides, it is worth noting that the effects of income improvement and job creation are strongly determined by household’s characteristics, i.e. number of working adults, experience of heads of households, and lending conditions in terms of loan size. In addition, rural credit facilitates the access to more nutrition of food in the minorities. Empirical results support that micro-credit intervention in the ethnic minority community has tendency to focus on job-creation and food nutrition rather than income improvement. The t-tests used in this paper support for the alternative hypothesizes that significantly different impact of rural credit program between two separated groups is reflected in terms of various variables.

This work is licensed under a Creative Commons Attribution 4.0 License.