Access to credit and non-farm activities: A quantitative analysis of household surveys in rural Vietnam

Abstract

The authors investigated the role of formal and informal credit in non-farm activities among Vietnamese rural households using pooled cross-sectional data from household surveys in 2016 and 2018. The econometric analysis confirms that households with more loans are more likely to engage in non-farm activities and increase the intensity of such activities. The probability and intensity of non-farm activities are also determined by the level of education and occupation of household heads. In addition, the presence of nonfarm opportunities and access to roads in a commune increase the chance of non-farm participation for households living in that commune. The study suggests that policy interventions for promoting rural non-farm economy should aim to improve rural households' access to formal credit, better education, and non-farming opportunities.