Sage Journals: Discover world-class research

Abstract

Although a large number of studies have investigated the impacts of microfinance on rural households, their effects on ethnic minorities, who are among the left-behind groups, have not been evaluated. This study examines whether microfinancing provided by the Vietnam Bank for Social Policies (VBSP) improves the household welfare of ethnic minorities living in northern mountainous regions of Vietnam. A stratified random sampling technique is applied to a sample of 289 households. Propensity score matching (PSM) is used to estimate the impacts of microfinance loans. Coarsened exact matching (CEM) is employed to verify the consistency of the PSM estimates. The results show positive and consistent impacts of microfinance loans on total expenditure per capita and educational expenditure per student, which supports the welfare effects of microfinance loans on ethnic minorities in northern mountainous areas of Vietnam.

Keywords

Microfinance ethnic minorities propensity score matching household welfare educational expenditure Vietnam

Get full access to this article

View all access options for this article.

References

Al-mamun

, Nurul

, Mazumder

, . 2014: Measuring the effect of Amanah Ikhtiar Malaysia’s microcredit programme on economic vulnerability among hardcore poor households. Progress in Development Studies, 14, 49–59. doi: 10.1177/1464993413504351.

Al-shami

S.S.A.

, Razali

R.M.

and Rashid

2018: The effect of microcredit on women empowerment in welfare and decisions making in Malaysia. Social Indicators Research, 137, 1073–90. doi: 10.1007/s11205-017-1632-2.

Augsburg

, De Haas

, Harmgart

, . 2015: The impacts of microcredit: Evidence from Bosnia and Herzegovina. American Economic Journal: Applied Economics, 7, 183–203. doi: 10.1257/app.20130272.

Banerjee

, Duflo

, Glennester

, . 2015: The miracle of microﬁnance? Evidence from a randomized evaluation. American Economic Journal: Applied Economics, 7, 22–53. doi: 10.1257/app.20130533.

Becker

S.O.

and Ichino

2002: Estimation of average treatment effects based on propensity scores. The Stata Journal, 2, 358–77.

Caliendo

and Kopeinig

2008: Some practical guidance for the implementation of propensity score matching. Journal of Economic Survey, 22, 31–72.

Chemin

2008: The benefits and costs of microfinance: Evidence from Bangladesh. The Journal of Development Studies, 44, 463–84. doi: 10.1080/00220380701846735.

Chowdhury

M.J.A.

, Ghosh

and Wright

R.E.

2005: The impact of micro-credit on poverty: Evidence from Bangladesh. Progress in Development Studies, 5, 298–309. doi: 10.1191/1464993405ps116oa.

Coleman

B.E.

2006: Microfinance in Northeast Thailand: Who benefits and how much? World Development, 34, 1612–38. doi: 10.1016/j.worlddev.2006.01.006.

10.

Dang

H.A.

2012: Vietnam: A widening poverty gap for ethnic minorities. Indigenous Peoples, Poverty, and Development, 304–43. doi: 10.1017/CBO9781139105729.008.

11.

X.L.

and Bauer

2016: Does credit access affect household income homogeneously across different groups of credit recipients? Evidence from rural Vietnam. Journal of Rural Studies, 47, 186–203. doi: 10.1016/j.jrurstud.2016.08.001.

12.

Duong

P.B.

and Thanh

P.T.

2014: Impact evaluation of microcredit on welfare of the Vietnamese rural households. Asian Social Science, 11, 190–201. doi: 10.5539/ass.v11n2p190.

13.

Fujii

2018: Has the development gap between the ethnic minority and majority groups narrowed in Vietnam? Evidence from household surveys. World Economy, 41, 2067–101. doi: 10.1111/twec.12578.

14.

Heckman

J.J.

, Lalonde

and Smith

1999: The economics and econometrics of active labor market programs. Handbook of Labor Economics, 3, part A, 1865–2097, https://doi.org/10.1016/S1573-4463(99)03012-6.

15.

Iacus

S.M.

, King

and Porro

2012: Causal inference without balance checking: Coarsened exact matching. Political Analysis, 20, 1–24. doi: 10.1093/pan/mpr013.

16.

Imai

K.S.

, Arun

and Annim

S.K.

2010: Microfinance and household poverty reduction: New evidence from India. World Development, 38, 1760–74. doi: 10.1016/j.worlddev.2010.04.006.

17.

Imbens

G.W.

and Rubin

D.B.

2015: Causal Inference: For Statistics, Social, and Biomedical Sciences an Introduction. Cambridge University Press. doi: 10.1017/CBO9781139025751.

18.

Khandker

S.R.

, Koolwal

G.B.

and Samad

H.A.

2009: Handbook on impact evaluation. The World Bank. doi: 10.1596/978-0-8213-8028-4.

19.

Khoi

P.D.

, Gan

, Nartea

G.V.

, . 2013: Formal and informal rural credit in the Mekong river delta of Vietnam: Interaction and accessibility. Journal of Asian Economics, 26, 1–13. doi: 10.1016/j.asieco.2013.02.003.

20.

Ledgerwood

, Earne

and Nelson

2013: The new microfinance handbook. The World Bank. doi: 10.1596/978-0-8213-8927-0.

21.

Lenhardt

and Samman

2015: In quest of inclusive progress: Exploring intersecting inequalities in human development. Research report, https://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/9932.pdf

22.

Lensink

and Pham

T.T.T.

2012: The impact of microcredit on self-employment profits in Vietnam. Economics of Transition, 20, 73–111. doi: 10.1111/j.1468-0351.2011.00427.x.

23.

, Gan

and Hu

2011: Accessibility to microcredit by Chinese rural households. Journal of Asian Economics, 22, 235–46. doi: 10.1016/j.asieco.2011.01.004.

24.

Maldonado

J.H.

and González-Vega

2008: Impact of microfinance on schooling: Evidence from poor rural households in Bolivia. World Development, 36, 2440–55. doi: 10.1016/j.worlddev.2008.04.004.

25.

Nguyen

V.C.

2008: Is a governmental micro-credit program for the poor really pro-poor? Evidence from Vietnam. Developing Economies, 46, 151–87. doi: 10.1111/j.1746-1049.2008.00061.x.

26.

Nguyen

2014: Microfinance in Vietnam: The real situation and policy recommendations. Vietnam Microfinance Working Group, http://www.microfinance.vn/microfinance-vietnam-real-situation-policy-recommendations/

27.

Nguyen

C.V.

, Tran

T.Q.

and Van Vu

2017a: Ethnic minorities in northern mountains of Vietnam: Employment, poverty and income. Social Indicators Research, 134, 93–115. doi: 10.1007/s11205-016-1413-3.

28.

Nguyen

H.T.M.

, Kompas

, Breusch

, . 2017b: Language, mixed communes, and infrastructure: Sources of inequality and ethnic minorities in Vietnam. World Development, 96, 145–62. doi: 10.1016/j.worlddev.2017.03.004.

29.

Pearl

1995: Casual diagrams for empirical research. Biometrika, 84, 669–710, https://doi.org/10.1093/biomet/82.4.669

30.

Pham

B.D.

and Izumida

2002: Rural development finance in Vietnam: A microeconometric analysis of household surveys. World Development, 30, 319–35. doi: 10.1016/S0305-750X(01)00112-7.

31.

Phan

D.K.

, Gan

, Nartea

G.V.

, . 2014: The impact of microcredit on rural households in the Mekong River Delta of Vietnam. Journal of the Asia Pacific Economy, 19, 558–78. doi: 10.1080/13547860.2014.920591.

32.

Phung

D.T.

, Nguyen

V.C.

, Nguyen

C.T.

, . 2016: Ethnic minorities and sustainable development goals: Who will be left behind? Report of UNDP, https://www.vn.undp.org/content/vietnam/en/home/library/poverty/ethnic-minorities-and-sustainable-development-goals--who-will-be.html

33.

Pitt

M.M.

and Khandker

S.R.

1998: The impact of group-based credit programs on poor households in Bangladesh: Does the gender of participants matter? Journal of Political Economy, 106, 958, http://www.jstor.org/stable/10.1086/250037?seq=1#page_scan_tab_contents

34.

Rafi Khan

and Rafi Khan

2016: Microcredit in South Asia: Privileging women’s perceptions and voices. Progress in Development Studies, 16, 65–80. doi: 10.1177/1464993415608083.

35.

Rosenbaum

P.R.

and Rubin

D.B.

1983: The central role of the propensity score in observational studies for causal effects. Biometrika, 70, 41–55. doi: 10.1093/biomet/70.1.41.

36.

Takahashi

, Higashikata

and Tsukada

2010: The short-term poverty impact of small-scale, collateral-free microcredit in Indonesia: A matching estimator approach. Developing Economies, 48, 128–55. doi: 10.1111/j.1746-1049.2010.00101.x.

37.

Thanh

P.T.

and Duong

P.B.

2017: Health shocks and the mitigating role of microcredit—The case of rural households in Vietnam. Economic Analysis and Policy, 56, 135–47. doi: 10.1016/j.eap.2017.08.006.

38.

Thanh

P.T.

, Saito

and Duong

P.B.

2019: Impact of microcredit on rural household welfare and economic growth in Vietnam. Journal of Policy Modeling, 41, 120–39. doi: 10.1016/j.jpolmod.2019.02.007.

39.

The World Bank 2009: Country social analysis ethnicity and development in Vietnam. World Bank, http://documents.worldbank.org/curated/en/495271468321531033/Main-report

40.

The World Bank 2012: Well begun, not yet done: Vietnam’s remarkable progress on poverty reduction and the emerging challenges. 2012 Vietnam Poverty Assessment, 74910, 177.

41.

UNDP 2018, July 29: What does it mean to leave no one behind? A UNDP discussion paper and framework for implementation.

42.

UNFPA 2011: Ethnic groups in Vietnam: An analysis of key indicators from the 2009 Vietnam population and housing census, 62. United Nations Population Fund in Vietnam.

43.

VBSP 2015: Annual report 2015, http://vbsp.org.vn/bao-cao-thuong-nien

44.

Xuan Luan

and Anh

N.T.L.

2015: Credit access in the northern mountainous region of Vietnam: Do ethnic minorities matter? International Journal of Economics and Finance, 7, 166–78. doi: 10.5539/ijef.v7n6p166.

Does Microfinance Improve the Household Welfare of Ethnic Minorities? Evidence from Bac Kan Province,Vietnam

Abstract

Keywords

Get full access to this article

References