Phát triển tín dụng cho hộ nghèo ở tỉnh thái nguyên tt tiếng anh

THAI NGUYEN UNIVERSITY
UNIVERSITY OF ECONOMICS & BUSINESS
ADMINISTRATION
................…………..

NGUYEN HUU THU

CREDIT DEVELOPMENT FOR POOR HOUSEHOLDS IN
THAI NGUYEN PROVINCE

Specialized: Economic management
Code: 9.34.04.10

SUMMARY OF THE ECONOMICS DISSERTATION

THAI NGUYEN, 2020


The dissertation was completed at
UNIVERSITY OF ECONOMICS & BUSINESS
ADMINISTRATION - THAI NGUYEN UNIVERSITY

Scientific Supervisors: Assoc. Prof. Pham Bao Duong

The peer review 1: ..............................................
The peer review 2: ..............................................

The dissertation was held in front of the committee of Thai Nguyen
University: UNIVERSITY OF ECONOMICS & BUSINESS
ADMINISTRATION
Meeting at:…………………………………

Date: ………… 2020

The dissertation can be found at:
- Learning Resource Center - Thai Nguyen University
- Library of Economics and Business Administration


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INTRODUCTION
1. Research rationale
Sustainable poverty reduction is the core objective of
Vietnam's development strategy, while approach credit is seen as an
important tool in strengthening financial support for the poor’s
economic development. However, recent studies indicated that the
poorest and the most vulnerable households often have difficulty in
accessing credit capital from the official region, only 28% of
households have at least one loan, while the proportion of households
having no loans, accounted for 70%. The operation of the official
credit network in Thai Nguyen Province which is engaged in
providing credit for poor households in recent years has developed
both in width and depth, nevertheless these networks has not yet met
the poor households’s credit capital demand sufficiently and in time.
Many poor households still have experienced difficulties in
approaching credit sources. The research questions are: What is
credit loan demand reality of poor families in Thai Nguyen? How is
the status of credit development for poor households in the locality?
Why is the rate of the poor households approached credit sources still
low? What are the reasons? What are the potential solutions for credit
development of poor households in province area? Therefore, the
scientific research named “Credit development for the poor

households in Thai Nguyen province", is most urgent. It has meaning
in both science and practically in the present circumstance.
2. Research objectives
2.1. General objective


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This research aims to assess the current status of poor
households' credit situation in Thai Nguyen province; to provide the
fundamental base in order to propose solutions for the poor families'
credit development to contribute to success of Multidimensional
Poverty Reduction, Sustainable Poverty Reduction in Thai Nguyen
province in the next development phases.
2.2. Specific objective
- To systematize, to elucidate the basis theoretical and the
reality of Credit Development for the poor households.
- Analyzing the actual status of credit development for poor
households; Assessing the impact of the credit on the living level of
the poor household; Analyzing factors that affect the development of
credit for poor households in Thai Nguyen Province.
- Proposing solutions for credit development for the poor
households in Thai Nguyen province in the coming period.
3. Subject of the research and study scale
3.1. Subject of the research
The subject of thesis is the credit development of official
Credit institution, taking part in providing credit for the poor
households in Thai Nguyen Province.
3.2. Study scale
3.2.1. Spatial scale
Thesis is conducted in Thai Nguyen province.

3.2.2. Temproral Scale
- Secondary data was collected in term of 2017-2018
- Primary data was investigated in 2017
3.2.3. Content scale


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- The thesis focuses on analyzing the content of credit
growth, credit quality, the type of credit, operational institutional
credit, credit access of poor households in Thai Nguyen province.
- The thesis analyzes and evaluates the impact of credit on
life of the poor household. Analyzing factors affecting the credit
development for poor households in Thai Nguyen province.
4. Research Contributions
(1) The thesis completed a theoretical step and practical basis
for Credit Development for poor households. In particular, the thesis
was given the concept of developing credit for poor households,
discussing the Credit development for poor households, identifying
assessment criteria and Influencing factors.
2) The research had comprehensive analysis of the reality of
poor households’ credit development in Thai Nguyen province in
many aspects: Credit development, credit quality, credit type, credit
organization, Credit accessibility, and credit operations. Research
analyzed factors affecting the credit development for the poor
households
3) The thesis is the first study using Probit regression models
to evaluate the credit access ability of the poor households, Tobit
model used to evaluate credit level that the poor household can
access. Propensity Score Matching (PSM) used to assess the impact
of the credit on the living standards of poor households in Thai

Nguyen Province.
(4) The thesis proposed comprehensive solutions system on
credit development for the poor households. That contributes to the


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success for implementation of multi-dimensional poverty reduction
goals and poverty reduction sustainable in Thai Nguyen province.
5. The structure of the thesis
Besides the introduction, conclusion and recommendations,
bibliography references and appendices, the thesis is organized into 5
chapters:
Chapter 1: Literature review
Chapter 2: Rationale and practice of credit development for
the poor households
Chapter 3: Research Methodology
Chapter 4: Current status of credit development for the poor
household in Thai Nguyen province
Chapter 5: Orientations and solutions for the poor
household’s credit development in Thai Nguyen province
Chapter 1
LITERATURE REVIEW
1.1. International research literatures
There have been quite a few researchS about the relationship
between credit for farmer households in general and poor households
in specific. In Related to the research content of the thesis, there are
some typical projects of: Aghion and Morduch (2005), Khandker
(2005), Morris and Barnes (2005), Jainaba and Partner (2005),
Yasmine (2008),Westover (2008), Takahashi and Partner (2010), Li
and Partner (2011),Al-Mamun and Partner (2015), Ganle and Partner

(2015), etc.
1.2. National researches literatures


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Poverty reduction and the credit role for the poor households,
which have been researched by lots of researchers. Among published
researches,those typical one relate to the research content of the
thesis, named: Pham Bao Duong, Izumida (2002), Barslund, Tarp
(2008), Nguyen Thi Quyen (2005), Phan Dinh Khoi et al (2013),
Nguyen Vietnam Cuong, Marrit van den Berg (2014), Chen Thi
Thanh Tu et al (2015), Pham Bao Duong, Pham Tien Thanh (2015),
Chen Lan Phuong (2016), Ocean Decision Win (2016), Ngo Manh
Main (2018), etc.
1.3. General results assessment related to the thesis
The abroad researches mainly using quantitative methods to
analyze the factors affecting credit access ability of the farmers, and
the poor households. Moreover, a number of authors also studied the
factors that affect the amount of capital that they can loan. Besides, a
number of studies have evaluated the impact of credit on their income
and expenditure.
Researches in Vietnam, which is mentioned by authors,
besides using descriptive statistic methods, comparisonS statistic to
analyze and assess, the authors also used the linear regression model
as Probit, Tobit, Heckman, Logic, DID, PSM to analyse the factors
affecting credit access, analyze the factors that affect the amount of
the loan and assess the impact of the credit on household living
standards.
1.4. The issues need to continue researching
Through an overview research of works in Vietnam and

abroad, as can see that the studies mentioned different aspects of
credit, the farmers and the poor households. However, the studies are


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still identifiable individuals. There are no studies,

studying the

contents of the poor household's credit development. Especially in
Thai Nguyen province, There is no research using Probit linear
regression model to analyze the credit accessibility of the poor
household, Tobit model analyzing capital loans, and PSM model to
assess the impact of the credit on the poor household's

living

standards. This is the opportunity for the author to continue studying.
Chapter 2
THEORETICAL AND PRACTICAL BASIS FOR THE
DEVELOPMENT OFFOR POOR HOUSEHOLDS
2.1. Theoretical basis of credit development for the poor households
2.1.1. Some basic concepts
2.1.1.1. Concepts of poverty, poor households
2.1.1.2. Concepts of credit
2.1.1.3. Concept of credit for the poor households
2.1.1.4. Concepts of development.
2.1.1.5. The concept of credit development for poor households
The credit development for the poor households is an
increase in scale of credit loans, with credit quality, increasingly

better. The types of credit increasingly diverse, institutional
organizations operate Increasingly relevant and the poor households
are easier in reaching credit capital sources.
2.1.2. Characteristics of credit development for the poor households
2.1.3. The role of credit development for the poor households

2.1.4. Content of research on credit development for the poor households
2.1.4.1. Research on credit growth for the poor households


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Credit growth for the poor households are activities in
increasing credit of the credit institution for the poor, in order to
satisfy more the capital needed for their production purpose,
business, job opportunities, solving partly necessities of housing,
clean water, energy for lightning, and education..
2.1.4.2. Research on credit quality for the poor household
Credit quality for the poor household is a general economic
targets, reflecting the results of credit activity of credit institutions
and meet the needs of debtors in line with the socio-economic
development of the country, while ensuring the existence and
development of the CI.
2.1.4.3. Research on the type of credit for the poor households
The type of credit for the poor household must match the
debtors ability. That is possible to develop some type of credit for the
poor households, based on the following criteria: in term of the time,
in terms of purposes, in terms of Organizations.
2.1.4.4. Research on the operation organisation of credit for the poor
households
Operations organization for the poor households is the most

important factor in allocation and effective using Credit resources for
the poor households. With standards in the Proper credit operation,
that will create a favorable environment for the Poor households, they
are easier to access credit capital.
2.1.4.5. Research on access to the poor households' credit
Credit access is the meeting between a side having demand
on using credit capital- the poor households, and the other side has
ability in meeting the requirement– the Credit Institution.


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2.1.5. State management on the credit development for the poor households
2.1.6. Factors affecting the credit development for the poor households
2.2. Practical basis of credit development for the poor households
2.2.1. Experiences on credit development for the poor household in
worldwide
Thesis focuses on researching experience of some countries,
are successful in credit development for the poor households, named:
Bangladesh, Nepal, India, Indonesia.
2.2.2. Experience on credit development for the poor households in
Vietnam
Thesis focuses on researching credit development experience
for the poor households from VBSP, PCF, MFIs (TYM).
2.2.3. Lessons learned for Thai Nguyen province on the credit
development for the poor households
Chapter 3
RESEARCH METHODS
3.1. Research questions
- The situation of development of credit for the poors in Thai

Nguyen province in past years?
- The impact of credit on living standard of poor houshold in
Thai Nguyen?
- The factors that effect the development of credit for poor
individuals in Thai Nguyen
- The method that need to enhance the development of credit
for poor household in Thai Nguyen?
3.2. Approach method and analytical framework
3.3. Selecting study area


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3.3.1. Method to select study area
- Selecting districts for the study: districts have been choosen
are Vo Nhai, Phu Luong, and Phu Binh
- Selecting communes for the study: in this study the
communes have been choosen depend on nature charateristcs and the
portion of poor household.
3.3.2. Data collecting methods
3.3.2.1. Collecting secondary data
3.3.2.2. Collecting primary data
Number of household for collecting data is calculated by
Slovin formula. After calculating, the study has the number of sample
is n = 391. In this study the number of sample is 400.
3.4. Method for collecting and analyzing data
3.4.1. Data collecting method
3.4.2. Data analyzing method
3.4.2.1. Descriptive statistic method
3.4.2.2. Comperative method
3.4.2.3. Estimation method

In this study Probit model has been choosen to analyze
the capability to aproach the oficial credit source of poor household,
Tobit model has been used to analyze the amount of the loan for poor
household, PSM model has been used to analyze the impact of credit
to living standard of poor household
3.5. System of research targets
Chapter 4
SITUATION OF DEVELOPMENT OF CREDIT FOR POOR
HOUSEHOLD IN THAI NGUYEN PROVINCE


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4.1. Natural and social - economical characterstics of Thai Nguyen province
4.2. Organizing credit for poor household in Thai Nguyen province
4.3. Situation of porverty and poverty reduction policies in Thai
Nguyen province
4.4 Development of credit for poor household in Thai Nguyen province
4.4.1. Growth of credit for poor household
In past years, the credit organizations in Thai Nguyen
province had oustanding growth in amount of loan, amount of debt,
and number of houshold having debt. In the period of 2010-2018, the
average growth of loan amount of VBSP is 8.06%, Microfinance
Institutions (TYM) is 20.17%, People Credit Fund is 5.1%. Growth
rate of debt amount of VBSP is 5.86 and the number of households
having debt is 35,047, TYM is 12.84% and 2,978 housholds having
debt, People Credit Fund is 9.70% and 265 households having debt.
4.4.2. Quality of credit for poor household
For Credit organizations: in the period of 2010-2018, the
quality of credit organizations has been steadily improved, the
number of overdue debt and charged-off debt is always under 1% of

total debt, particaly for TYM percent of paid debt is 100%. Besides,
debt collection coefficient, cycle of money and rate of interest
collection of credit organizations are steadily growing year by year.
The portion of accupied debt is always equal 0, this shows the high
security in credit activity of credit organizations.
For poor households: aproaching to credit brings to poor
household many opotunities in place work, and help to change
awareness of the poor, and help them to appy science applycation to
enhance productivity, income and living standard.


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4.4.3. Types of credit for poor household
Credit organizations are applying mortgage credit for poor
house hold through local social and political organizations for shortterm, mid-term and long-term loan concentrate on agriculture nonagriculture activities and other activities.

4.4.4. Credit organizations and institutions for poor household credit
Each credit organization has different regulation of interest
rate, loan maturity, date, lending methods, repayment modes, debt
repayment rescheduling and loan rescheduling depend on their
characterstics.
* Capability to aproach credit of poor household
In total 400 households have been inquired, 272 households
have credit loans, 128 households do not have credit loan (in 3 years,
2015-2017). In which, Phu Luong district has highest portion with
90% and Phu Binh district has lowest portion with 57.14% (Table 4.4).
Table 4.4: Capability to aproach credit loan of poor household
Vo
Nhai

Districts
Phu
Luong

Phu
Binh

Observations

(%)

Total number of surveyed
households
- Households borrow

154

120

126

400

100

92

108

72

272

68

- Households do not borrow

62

12

54

128

32

Criteria

Total

Source: Compiled from survey data in 2017
* Capability to aproach credit of poor household
In total 400 households investigated, 77 households have
never had loan, 323 household have had loan, in which 229
households often have loan. Rate of credit aproaching show the loans
effectieness of these families (Table 4.9)


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Table 4.9: Rate of credite aproaching of poor households

Criteria
Total number of surveyed
households
1. Households have never
borrowed

Vo
Nhai

Districts
Phu
Phu
Luong Binh

Total
Observations

(%)

154

120

126

400

100

45

11

21

77

19.25

2. Households have borrowed

109

109

105

323

80.75

- Households often borrow

75

83

71

229

57.25

Source: Compiled from survey data in 2017
* Rate of credit for poor household satisfied
Average demand for loan from VBSP is 45.8 million VND,
while amount of money lent is 37.5 million VND. Average demand
for loan from People Credit Fund is 32.5 million VND and amount of
money lent is 23.9 million VND. Average demand for loan from
TYN is 20 million VND and amount of money lent is 15.5 million
VND. Such, the capability to satisfy the demand of loan for poor
household is 77.47% and 22,53% is not satisfied.
* Method to aproach credit for poor household
There are 2 methods to aproach credit for poorhousehold
direct aproaching and indirect aproaching. First, poor families can
aproach credit directly through credit organization and do not need
intermediate step, there are 34 per 304 loans. Second, most of poor
household aproach credit through local social and political
organizations, acount for 89.14% of total loans (Table 4.11).


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Table 4.11: Method to aproach credit of poor household
Criteria
Total amount of loan
- Direct aproaching
- Indirect aproaching

No. of Borrowings
Vo
Phu
Phu
Nhai
Luong
Binh
92
0
92

116
9
107

96
24
72

Total
Observations
304
33
271

(%)
100
10.86
89.14

Source: Compiled from survey data in 2017
* Experimental analysis results
Table 4.12: Estimated Results using Probit models
Variables

crd

Gender
Age
Age Square
Ethnicity
Education
Household Size
Male Member
Labor-force Ratio
Main Job
Social Capital
Non-productive Asset
Productive Asset
Residential Land
Agricultural Land
Constant
Percentage of
Prediction orrectness
Wald chi2(14)
(Prob > chi2)
Obs

Gender
Age

Agesq
Ethnic
edu2
Hhsize
Maleno
Labor
mainjob1
Socap
asset1
asset2
Landha
land234ha
Cons

Accessibility to Credit
Coef
t-stat
Marginal Effect
-0,069
-0,47 -0,024
0,153***
2,71 0,053***
-0,002**
-2,45 -0,001**
0,394**
2,35 0,136**
0,261*
1,66 0,090*
-0,010
-0,10 -0,003

-0,130
-1,36 -0,045
1,638**
2,36 0,564**
0,535***
2,75 0,184***
-0,189
-0,91 -0,065
0,018***
5,29 0,006***
-0,012
-1,26 -0,004
-3,815**
-2,03 -1,313**
0,087
0,30 0,030
-4,590***
-3,83
71,50%
59.79
(0.00)_
400

Note: *, ** and ***: Significant at 10%, 5% and 1%, respectively
Table 4.13: Estimated Results using Tobit models
Variables
Gender
Age
Age Square
Ethnicity

crd
gender
Age
Agesq
ethnic

Coef
-0,338
3,710***
-0,041***
8,036**

Amount Granted
t-stat
Marginal Effect
-0,11 -0,265
2,91 2,906***
-2,67 -0,032***
2,42 6,294**


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Education
Household Size
Male Member
Labor-force Ratio
Main Job
Social Capital
Non-productive Asset

Productive Asset
Residential Land
Agricultural Land
Constant
Sigma
F( 14, 386)
(Prob > F)
Obs

edu2
hhsize
maleno
Labor
mainjob1
Socap
asset1
asset2
landha
land234ha
Cons

3,248
3,273*
-2,145
22,085
12,884***
-2,442
0,344***
-0,235
-111,460***

6,479
-104,544***
27,073***

1,01
1,82
-1,12
1,56
2,80
-0,53
6,18
-1,20
-2,66
1,07
-3,94
22,56
5.85
(0.00)
400

2,544
2,563*
-1,680
17,298
10,091***
-1,913
0,269***
-0,184
-87,298***
5,075

Note: *, ** and ***: Significant at 10%, 5% and 1%, respectively
Table 4.12 shows the estimated results from Probit and Tobit
model. Percentage of Correctness Prediction is 71.5 per cent, which
means that the explanatory variables in Probit model explain the
access to formal credit quite well.
Table 4.12,4.13 shows that such variables as age, education,
Kinh ethnicity, labor-force ratio, main job, value of non-productive
assets and area of residential land have statistically significant effect
on households’ accessibility to formal credit and/or amount granted.
The remaining variables, including gender, household size, number
of male and working-age members, social capital, value of productive
assets, area of agricultural land have insignificant effect on
households’ accessibility to formal credit and/or amount granted.
4.5. Factors that impact development of poor households credit
in Thai Nguyen province
4.5.1. Factors from poor households
4.5.2. Factors from credit organizations
4.5.3. Other factors


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4.6. Impact of Formal Credit on Living Standard of Poor
Households in Thai Nguyen Province
Table 4.15 shows that formal credit has no significant impact on
revenue from agricultural activities (cultivation and livestock-rearing).
The results are consistent among matching techniques

(Nearest-

Neighbor, Kernel and Radius). As for self-employment, Table 6
reveals that formal credit borrowers have significantly higher revenue
than their non-borrowing counterparts by 1.642 and 1.576 million
VND using Radius with caliper = 0.05 and Kernel matching,
respectively.
Table 4.15: Impact Evaluation of Formal Credit on Revenue
Outcome
NNM (n=1)
Radius (Cal=0.01)
Radius (Cal=0.05)
Kernel

Cultivation
ATT
t-stat
3,381
1,52
2,557
1,44
2,047
1,21
2,095
1,39

Livestock
ATT
t-stat
0,720
0,32
0,378

0,17
0,573
0,42
0,462
0,29

Self-employment
ATT
t-stat
0,311
0,22
1,083
0,89
1,642*
1,90
1,576*
1,77

Note: *, ** and ***: Significant at 10% and 5%, respectively
Nearest-Neighbor (NN) matching with n = 1
As for the impact of formal credit on expenditures, Table 4.16
indicates that formal credit has no significant impact on the poor
households’ expenditure for food consumption. The reason is that
most of the poor locate in the rural area, where food can be selfsufficient, hence they may not use credit for food consumption. The
results find that formal credit borrowers have higher expenditure for
necessarynon-food items than the non-borrowers, which indicate that
borrowers spend more on the items that they cannot produce by
themselves, such as soap, detergent, etc..

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Table 4.16: Impact Evaluation of Formal Credit on Expenditure
Food

Outcome

ATT
0,170
0,086
0,035
0,033

NNM (n=1)
Radius (Cal=0.01)
Radius (Cal=0.05)
Kernel

Necessities
ATT
0,100**
0,090**
0,065*
0,067*

t-stat
0,85
0,61
0,28
0,26

t-stat
2,07
2,07
1,79
1,72

Note: *, ** and ***: Significant at 10% and 5%, respectively
Nearest-Neighbor (NN) matching with n = 1
Table 4.17 shows no impact of formal credit on the expenditure
for non-productive assets but positive impact on productive assets. It
implies the poor truly use their credit for investment purpose, which
may benefit them in a longer term and sustainably rather than for
purchasing assets which only serve short-term welfare.
Table 4.17: Impact Evaluation of Formal Credit on Durable Assets
Durable Assets

Outcome

Non-productive

Productive

ATT

t-stat

ATT

t-stat

ATT

t-stat

NNM (n=1)

0,578

1,21

-0,024

-0,15

0,602*

1,83

Radius (Cal=0.01)

0,548

1,07

-0,035

-0,24

0,583*

1,80

Radius (Cal=0.05)

0,39

1,05

-0,052

-0,43

0,441*

1,82

Kernel

0,412

1,31

-0,051

-0,46

0,462*

1,68

Note: *, ** and ***: Significant at 10% and 5%, respectively
Nearest-Neighbor (NN) matching with n = 1
4.7. General assessment of credit development for poor
households in Thai Nguyen province
4.7.1. Achievements in credit development for poor households
First,

credit

deelopmet

for

poor

household:

credit

organizations had outstanding deelopment through expanding amount
of credit for poor household, and number of poor families aproached
to credit.


17
Second, quality of poor household credit: portion of overdue
debt, off-charged debt in total debt in resent years are always under
1%, which showed the high security of poor household credit.
Aproaching to credit give poor families more chance to have in place
jobs and change the awareness of poor household.

Third, types of poor household credit: credit organizations
have sucessfully applied traditional credit types are short-term, midterm anf long-term. In which, credit organization not only
concentrate on loans for agrculture activities.
Forth, institutions and organizing credit for poor household:
policies for poor household credit have been comprehensive,
consistent and synchronized deploied. These policies give chance for
poor household to aproach to credit.
Fifth, credit aproaching for poor household: there are
272/400 families aproached to credit with 304 loans from official
credit organizations. Credit organization has adjust to increase the
amount of loan to facilitate poor household to expand their
production or change production models, raise livestock or expand
other activities.
4.7.2. Restrictions on credit development for poor households
Firstly, credit growth for poor households: rate of credit
growth and number of credit growth of poor households of credit
institutions are low and unstable. The number of credit institutions
involved in lending to poor households is still small. The operational
network of a number of formal credit institutions is still limited and
unevenly distributed.


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Secondly, in terms of credit quality for poor households:
Overdue and frozen debts of some credit institutions have decreased
over the years but still exist. Some households use the loan for the
wrong purpose.
Thirdly, on the types of credit for poor households: The
variety of credit types for poor households of credit institutions in
Thai Nguyen province is still very limited to term loans and little use

of other forms of credit has partly limited the credit activity diversity
of credit institutions.
Fourthly, on the institution and organizing of credit
operations for poor households: The mechanism for managing
interest rates is still rigid, the mode of lending, the level of loans, and
the term of loans are not really flexible.
Fifthly, access to credit of poor households: Access to credit
information, market information of poor households in many regions
still faces many difficulties. As a result, a large proportion of poor
households have demand for loans but lack of information has not
been able to access credit capital.
4.7.3. The cause of the limitations in developing credit for poor
households
The amount of gorvernment capital investment in credit
programs for poor households has not met actual needs.
Capital sources of credit institutions are limited, capital
mobilization from organizations and individuals still faces many
difficulties.
Credit officers of credit institutions are still thin.


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The operational quality of the savings and loan groups, the
loan group has not really met the requirements set out.
Banking technology as well as telecommunication network in
remote areas has not developed.
The professional level and awareness of the poor is limited so
the use of capital is not effective.
The coordination between credit institutions and social and
political organizations and programs in poverty reduction is still very

limited.
Infrastructure does not meet the needs of both credit
institutions and poor households. Poor households do not have
production and business experience.
Chapter 5
ORIENTATIONS AND SOLUTIONS FOR CREDIT
DEVELOPMENT FOR POOR HOUSEHOLDS IN THAI
NGUYEN PROVINCE
5.1. Domestic and local context for credit development for poor
households in Thai Nguyen province
5.2. Sustainable poverty reduction orientation in Thai Nguyen
province
5.3. Viewpoints on credit development orientation for poor
households in Thai Nguyen province
5.4. Credit development solution for poor households in Thai
Nguyen province
5.4.1. Credit growth solution group for poor households
- Diversify sources of capital, strengthen capital mobilization
methods.
- Continue to reform administrative procedures.


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- Expanding the network, strengthening transaction offices
and transaction points.
- Increase medium and long-term loans.
5.4.2. Group of credit quality solutions for poor households
- Enhancing training and improving the quality of the team.
- Consolidating and improving the operational quality of the
Savings and Credit Groups, loan groups.

- Strengthen the inspection and control of the use of loan
capital.
- Strengthen debt management, limit overdue debts.
5.4.3. Group of solutions to diversify types of credit for poor
households
- Flexibility according to household economic status and
suitable for the poor.
- Enhancing lending through groups.
- Providing credit according to the production chain
- Providing credit to investment project owners and owners
of production and business establishments that employ laborers and
consume products made by the poor.
5.4.4. Group of institutional solutions to operate credit activities for
poor households
- Lending interest rate and form of guarantee when
borrowing capital.
- Loan term and loan amount.
- Lending method.
5.4.5. Group of solutions to improve access to credit of poor
households


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- Improve the capacity and organization of production and
business households.
- Poor households should actively learn about lending and
lending activities of credit institutions.
- Households need to diversify jobs through non-agricultural
activities.
- Strengthening the role and performance of local

governments and social organizations.
5.4.6. Group of integrated solutions, other support
- Coordinate and integrate the poverty reduction objectives
and tools of credit policy with the poverty reduction policy.
- Enhancing the coordination between State management
agencies, social-organizations and credit institutions.
- Investment in building essential infrastructures for poor
communes.
- Implement policies to support production land for poor
households.
CONCLUSIONS AND RECOMMENDATIONS
CONCLUSIONS
Firstly, the thesis systematized Demystifying theoretical
basis and practical on credit development for the poor household.
According to researchers about Status of credit development for the
poor households in some countries in the world and in Vietnam, the
thesis drew 7 lessons learned for Thai Nguyen province on the poor
household's credit development.
Secondly, the thesis analyzed the poor household's credit
development status on many aspects: credit growth, credit quality,


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the type of credit, institutional operation of credit, and credit access
of the poor households. Analytical results from Probit and Tobit
model showed influencing factors, having statistical significance to
credit access ability of the poor households as: age, ethnicity,
education, labor rate, major industrial sectors, financial products and
non-productive land. Affect factors had statistical significance to the
amount of loans capital, including: age, ethnicity, household

members and main occupation, non-production assets and land use.
Results of assessing impact of credit on household living standards
by PSM methods, showing credit's debtors officially revenue from
higher nonfarm business production is higher than non loans group
and have accounts spending on non-essential good food, spending on
asset serving for production which is higher than non-loans group.
Thirdly, the thesis proposed solutions system in order to
develop credit for the poor households in Thai Nguyen province in
upcoming stage: Group of solutions on credit development, solution
for credit quality group, solutions for credit types group, group of
solutions for institutional credit operation, group of solution on credit
access for the poor household and some other integration solutions.
RECOMMENDATIONS
For the Government
- Planning on credit development network of credit
institutions in the agricultural are of province, especially in
mountainous area, and remote area
- To allocate sufficient funds to implement programs and
approved policy


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- Creating opportunity for credit institutions to access capital
from outside
- There are incentives on capital for businesses, where the
cooperative to attract jobs site and product consumption for poor
households produce.
For local governments in Thai Nguyen
- Strengthening the leadership and guidance of the Party
Committee, the rights to operate the credit for the poor.

- Directing all levels and branches needing to regularly
reviewed, verified and recognized the right poor household
- To interest in supporting and creating favorable conditions
for the credit operation.
- Coordinating with credit organizations in order to regularly
monitor and supervise the process of poor household using loans.
For the State Bank in Thai Nguyen
- Implementing State management competence for the
operation of credit institutions lending to the poor in the locality.
- Strengthening the monitoring credit activities of credit
institutions, provide support for credit institutions operating in the
agricultural and rural sector.
- Strengthening measures credit management policies,
improve the efficiency of inspection and management of the
agricultural bank.
- Directing credit institutions in reforming administrative
procedures in the simple loan work, convenient and fit with the poor.