The impact evaluation of rural credit on accessibility to education, health care and clean water in rural Vietnam

Abstract

The research is conducted in order to evaluate the impact of rural credit program on living standard of the rural households. The estimation is based on the secondary data, namely the Vietnam household living standard survey in 2010 (VHLSS2010). The research applied propensity score matching (PSM) method with various techniques in order to estimate the impact of rural credit program on living standard. The results found that participation in rural credit only increase the expenditure on education while there is no evidence to conclude the relationship between rural credit program and such living standard indicators as accessibility to health care and clean water. Moreover, the research also applied PROBIT model to investigate the factors that affect the probability of accessing to rural credit program. The results showed that the probability of participating in rural credit program of the rural households are affected by such factors as age of household head, leadership status of household head, household size, house value, total land owned and managed by the household, household being poor or not, and geographic location. The research also found that the rural credit program may not serve the poor because among the participants in the credit program, the number of the poor households is less than that of the non-poor households. Finally, the research suggested policies and solution to improve the effectiveness of rural credit program in order to support the poor households.