[STBI-18-05-2017] Microcredit and Welfare of the Rural Households in Vietnam

Since its birth in 1970s, microcredit has been growing rapidly with the aim to reduce poverty and to promote economic growth. In this paper, we focus on the effect of microfinance in rural Viet Nam using the panel data of the Vietnam Access to Resources Household Surveys (VARHS). The objective is to examine the effect of microcredit at the micro level. The research employs matched Differnce-in-Difference to identify the effect of microcredit on various outcomes such as total production value, income, food consumption, accumulation of assets and job creation. The results show that microcredit benefits self-employment rather than other activities. Moreover, microcredit is found to increase the accummulation of  production assets, enhance food consumption and create more employment.