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Is A Governmental Micro‐Credit Program For The Poor Really Pro‐Poor? Evidence From Vietnam

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  • Nguyen Viet CUONG

Abstract

It is argued that without collateral the poor often face binding borrowing constraints in the formal credit market. This justifies a micro‐credit program, which is operated by the Vietnam Bank for Social Policies to provide the poor with preferential credit. The present paper examines poverty targeting and the impact of the micro‐credit program. It is found that the program is not very pro‐poor in terms of targeting. The nonpoor account for a larger proportion of the participants. The nonpoor also tend to receive larger amounts of credit compared to the poor. However, the program has reduced the poverty rate of the participants. The positive impact is found for all three Foster‐Greer‐Thorbecke poverty measures.

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  • Nguyen Viet CUONG, 2008. "Is A Governmental Micro‐Credit Program For The Poor Really Pro‐Poor? Evidence From Vietnam," The Developing Economies, Institute of Developing Economies, vol. 46(2), pages 151-187, June.
    • Handle: RePEc:bla:deveco:v:46:y:2008:i:2:p:151-187
    DOI: 10.1111/j.1746-1049.2008.00061.x
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    1. Cuong, Nguyen Viet & Tung, Phung Duc & Westbrook, Daniel, 2015. "Do the poorest ethnic minorities benefit from a large-scale poverty reduction program? Evidence from Vietnam," The Quarterly Review of Economics and Finance, Elsevier, vol. 56(C), pages 3-14.
    2. Arouri, Mohamed & Nguyen, Cuong & Youssef, Adel Ben, 2015. "Natural Disasters, Household Welfare, and Resilience: Evidence from Rural Vietnam," World Development, Elsevier, vol. 70(C), pages 59-77.
    3. Sefa K. Awaworyi, 2014. "The Impact of Microfinance Interventions: A Meta-analysis," Monash Economics Working Papers 03-14, Monash University, Department of Economics.
    4. Kang, Woojin & Imai, Katsushi S., 2012. "Pro-poor growth, poverty and inequality in rural Vietnam," Journal of Asian Economics, Elsevier, vol. 23(5), pages 527-539.
    5. Dao, Nguyen Dinh, 2020. "Does the microcredit intervention change the life of the low- and middle-income households in rural Vietnam? Evidence from panel data," World Development Perspectives, Elsevier, vol. 20(C).
    6. Sikor, Thomas & Baggio, Jacopo Alessandro, 2014. "Can Smallholders Engage in Tree Plantations? An Entitlements Analysis from Vietnam," World Development, Elsevier, vol. 64(S1), pages 101-112.
    7. Kotsila, Panagiota & Saravanan, V. Subramanian, 2017. "Biopolitics Gone to Shit? State Narratives versus Everyday Realities of Water and Sanitation in the Mekong Delta," World Development, Elsevier, vol. 93(C), pages 374-388.
    8. Thanh, Pham Tien & Saito, Katsuhiro & Duong, Pham Bao, 2019. "Impact of microcredit on rural household welfare and economic growth in Vietnam," Journal of Policy Modeling, Elsevier, vol. 41(1), pages 120-139.

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