Effects of social capital on credit access of farming households in Vietnam

Abstract

Social capital is considered as an influential factor in economic transactions, including credit access. The research aims at testing relationships between components of social capital and credit access in Vietnam’s rural areas. The testing is conducted with binary logistic and multinomial logistic regression models. The results show that formal social network reduces possibility of getting access to formal credit, and households with wider formal social networks are likelier to belong to the group with access to semi-formal credit than the group with access to formal credit. Such conflicting results may come from specific characteristics of credit market in Vietnam’s rural areas.