Factors Influencing the Capacity to Repay Loans on Time of Tea Growing Households

Tea is the main crop of Thai Nguyen province, Vietnam. Tea is a crop that helps eliminate hunger and reduce poverty, and is a crop that enriches over 91 thousand farming households with many products certified by OCOP (One Commune One Product) and VietGAP (Vietnamese Good Agricultural Practices). In particular, tea-growing households have proactively sought loans to finance organic tea growing activities, aiming at sustainable development. This study aims to analyze the factors affecting the ability to repay debts on time of tea-growing households in Thai Nguyen, Vietnam. The research data is based on a survey of 350 tea-growing households in this area. Heckman's two-step model is used to estimate the influencing factors. The study has shown that the factors affecting the capacity to repay loans on time of tea growing households in Thai Nguyen, Vietnam include 6 factors: Number of dependents, Total loan amount, Number of harvests, Total assets, Purpose of loan use; and Tea growing experience. In addition, there are 5 factors affecting the amount of loan repayment on time of tea growing households including: Education level, total assets, number of maturity periods and tea growing area of the household. Based on the survey data, the study proposes solutions to improve the efficiency of loan use, contributing to better timely loan repayment of tea growing households.