Is a governmental micro-credit program for the poor really pro-poor? Evidence from Vietnam

N. Nguyen Viet Cuong

Research output: Contribution to journalArticleAcademicpeer-review

42 Citations (Scopus)

Abstract

It is argued that without collateral the poor often face binding borrowing constraints in the formal credit market. This justifies a micro-credit program, which is operated by the Vietnam Bank for Social Policies to provide the poor with preferential credit. The present paper examines poverty targeting and the impact of the micro-credit program. It is found that the program is not very pro-poor in terms of targeting. The nonpoor account for a larger proportion of the participants. The nonpoor also tend to receive larger amounts of credit compared to the poor. However, the program has reduced the poverty rate of the participants. The positive impact is found for all three Foster-Greer-Thorbecke poverty measures.
Original languageEnglish
Pages (from-to)151-187
JournalDeveloping Economies
Volume46
Issue number2
DOIs
Publication statusPublished - 2008

Keywords

  • poverty
  • impact

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