By using data from the Vietnam household survey, this article estimates determinants of the probability of default for households borrowing from formal, informal and semi-formal credit sectors in Vietnam. A special feature of the article is that it investigates which type of lender is faced with the riskiest borrowers. The estimates suggest that borrowers from informal lenders are more risky than borrowers from formal and semi-formal lenders.
Agénor, P–R. and P.J. Montiel (1999), Development Macroeconomics (2nd ed). Princeton, New Jersey: Princeton University Press .
2.
Aleem, I. (1990), ‘ Imperfect Information, Screening, and the Costs of Informal Lending: A Study of a Rural Credit Market in Pakistan ’, The World Bank Economic Review, 4(3): 329–49 .
3.
Atieo, R. (2001), ‘Formal and Informal Institutions Lending Policies and Access to Credit by Small–Scale Enterprises in Kenya: An Empirical Assessment’, Research paper 111, African Economic Research Consortium in Nairobi , November.
4.
Avery, R.B. , P.S. Calem and G.B. Canner (2004), ‘ Consumer Credit Scoring: Do Situational Circumstances Matter? ’, Journal of Banking and Finance, 28(4): 835–56 .
5.
Besley, T. (1995), ‘Savings, Credit and Insurance’, in J. Behrman and T.N. Srinivasan (eds), Handbook of Development Economics, Vol. 3A, pp. 2123–207. Amsterdam: North Holland Press.
6.
Bester, H. (1985), ‘ Screening vs Rationing in Credit Markets with Imperfect Information ’, American Economic Review, 75(4): 850–55 .
7.
Biddle G. , Bowen R . and J.S. Wallace (1997), ‘ Does EVA Beat Earnings? Evidence on Associations with Stock Returns and Firm Value ’, Journal of Accounting and Economics, 24(3): 301–36 .
8.
Boot, A.W.A. , A.V. Thakor and G.F. Udell (1991), ‘ Secured Lending and Default Risk: Equilibrium Analysis, Policy Implications and Empirical Results ’, Economic Journal, 101(406 ): 458–72 .
9.
Bottomley, A. (1975), ‘ Interest Rate Determination in Underdeveloped Rural Areas ’, American Journal of Agricultural Economics, 57(2 ): 279–91 .
10.
Boucher, S. (2002), ‘State Contraction and Credit Market Development in Rural Peru’, revised version of chapter two of the doctoral dissertation, University of Wisconsin, US .
11.
Chandravarkar, A. (1987). ‘The Informal Financial Sector in Developing Countries: Analysis, Evidence and Policy Implication’, SEACEN Occasional Paper 2, Kuala Lumpur, Malaysia , August.
12.
Dao V.H. (1999), ‘Outreach Diagnostic Report: Improving Low–Income Household Access to Formal Financial Services in Vietnam’, Canada Rural Finance Outreach Project, Vietnam .
13.
Ghatak, S. (1983), ‘ On Interregional Variations in Rural Interest Rates ’, Journal of Developing Areas, 18: 21–34 .
14.
Hoff K. and J.E. Stiglitz (1990), ‘ Introduction: Imperfect Information and Rural Credit Markets–Puzzles and Policy Perspectives ’, The World Bank Economic Review, 4(3): 235–50 .
15.
Jacobson, T. and K. Roszbach (2003), ‘ Bank Lending Policy, Credit Scoring and Value–At–Risk ’, Journal of Banking and Finance, 27(4): 615–33 .
16.
Jiménez, G. and J. Saurina (2004), ‘ Collateral, Type of Lender and Relationship Banking as Determinants of Credit Risk ’, Journal of Banking and Finance, 28(9 ): 2191–212 .
17.
Le K.N. (2003), ‘Investment of Rice Mills in Vietnam: The Role of Financial Market Imperfections and Uncertainty’, Doctoral dissertation, University of Groningen, the Netherlands .
18.
Maddala, G.S. (2001), Introduction to econometrics third edition.New York: John Wiley & Sons .
19.
Manove, M. and A.J. Padilla (1999), ‘ Banking (conservatively) with Optimists ’, RAND Journal of Economics, 30(2): 324–50 .
20.
Manove, M. and A.J. Padilla (2001), ‘ Collateral versus Project Screening: A Model of Lazy Banks ’, RAND Journal of Economics, 32(4): 726–744 .
21.
McCarty, A. (2001), Microfinance in Vietnam: A Survey of Schemes and Issues. Department for International Development, State Bank of Vietnam .
22.
Paxton, J. , D. Graham and C. Thraen (2000), ‘ Modeling Group Loan Repayment Behavior: New Insights from Burkina Faso ’, Economic Development and Cultural Change, 48(3): 639–55 .
23.
Ray, D. (1998), Development Economics. P rinceton: Princeton University Press .
24.
Sharma, M. and M. Zeller (1997), ‘ Repayment Performance in Group–Based Programs in Bangladesh ’, World Development, 25(10): 1731–742 .
25.
Vietnam Investment Review (2003), 21 August.
26.
World Bank (2001), Vietnam Living Standards Survey (VLSS): 1997–98: Basic Information, Poverty and Human Resources Division. Washington DC: World Bank .
27.
World Bank (2002), Banking Sector Review: Vietnam. Washington DC: World Bank .
28.
Zeller, M. (1994), ‘ Determinants of Credit Rationing: A Study of Informal Lenders and Formal Credit Groups in Madagascar ’, World Development, 22(12): 1895–907 .
