FORMAL CREDIT, RURAL HOUSEHOLD LIVING STANDARDS: A STUDY OF THE NORTH CENTRAL REGION OF VIETNAM

This study focuses on evaluating the impact of access to formal credit on the living standards of rural households in the North Central region of Vietnam. The propensity score matching (PSM) method was used on the Vietnam Household Living Standards Survey (VHLSS) 2020 database to examine this impact. The research results indicate that participation in formal credit has the potential to improve the living standards of households in the rural area of the North Central region. The improvement is approximately 2 percent of per capita income. In addition, this study also shows that formal credit can have a positive impact on poverty reduction. Specifically, participation in formal credit reduces poverty rates in rural areas of North Central Vietnam, although the reduction in these poverty rates is still modest.