Formal and Informal Rural Credit in Four Provinces of Vietnam

TY - UNPB

T1 - Formal and Informal Rural Credit in Four Provinces of Vietnam

AU - Barslund, Mikkel Christoffer

AU - Tarp, Finn

N1 - JEL Classification: O12, O16, O17, O18

PY - 2007

Y1 - 2007

N2 - This paper uses a survey of 932 rural households to uncover how the rural credit market operates in four provinces of Vietnam. Households obtain credit through formal and informal lenders. Formal loans are almost entirely for production and asset accumulation, while informal loans are used for consumption smoothening. Interest rates fell from 1997 to 2002, reflecting increased market integration. Moreover, the determinants of formal and informal credit demand are distinct. While credit rationing depends on education and credit history, in particular, regional differences in the demand for credit are striking. A ‘one size fits all' approach to credit policy in Vietnam would be inappropriate

AB - This paper uses a survey of 932 rural households to uncover how the rural credit market operates in four provinces of Vietnam. Households obtain credit through formal and informal lenders. Formal loans are almost entirely for production and asset accumulation, while informal loans are used for consumption smoothening. Interest rates fell from 1997 to 2002, reflecting increased market integration. Moreover, the determinants of formal and informal credit demand are distinct. While credit rationing depends on education and credit history, in particular, regional differences in the demand for credit are striking. A ‘one size fits all' approach to credit policy in Vietnam would be inappropriate

KW - Faculty of Social Sciences

KW - rural credit

KW - household survey

KW - Vietnam

M3 - Working paper

BT - Formal and Informal Rural Credit in Four Provinces of Vietnam

PB - Department of Economics, University of Copenhagen

CY - Cph.

ER -