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Credit Constraints and Impact on Farm Household Welfare: Evidence from Vietnam’s North Central Coast region

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  • Tran, Minh Chau
  • Gan, Christopher
  • Hu, Baiding

Abstract

This study aims at identifying factors affecting formal credit constraint status of rural farm households in Vietnam’s North Central Coast region (NCC). Using the Direct Elicitation method (DEM), we consider both internal and external credit rationing. Empirical evidences confirm the importance of household head’s age, gender and education to household’s likelihood of being credit constrained. In addition, households who have advantages in farm land size, labour resources and non-farm income are less likely to be credit constrained. Poor households are observed to remain restricted by formal credit institutions. Results from the Endogenous Switching Regression model suggest that credit constraints have negative impact on household’s consumption per capita and informal credit can act as a substitute to mitigate the negative influence of formal credit constraints.

Suggested Citation

  • Tran, Minh Chau & Gan, Christopher & Hu, Baiding, 2014. "Credit Constraints and Impact on Farm Household Welfare: Evidence from Vietnam’s North Central Coast region," 2014 Conference, August 28-29, 2014, Nelson, New Zealand 187495, New Zealand Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:nzar14:187495
    DOI: 10.22004/ag.econ.187495
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    Keywords

    Agribusiness; Community/Rural/Urban Development; Consumer/Household Economics; International Development;
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