Although access to credit is seen as a key factor in ending poverty, just 29 percent or so of rural households have received loans, a new report says (Photo: giaoducthoidai.vn) Hanoi (VNS/VNA) - Although access to credit is seen as a keyfactor in ending poverty, just 29 percent or so rural households havereceived loans, a new report says.
Released on November 8, the report titled “Characteristics of theVietnamese rural economy: Evidence from a 2016 rural household survey in12 provinces of Vietnam” was compiled by the Central Institute forEconomic Management (CIEM), World Institute for Development Researchunder the United Nations University (UN-WIDER) and Institute of LabourScience and Social Affairs (ILSSA).
The report says that a survey of 2,669 families found improvement inrural households’ living conditions but a low percentage of access tocredit.
Finn Tarp, director of UNU-WIDER, said that the report showed anincrease in the poverty percentage under criteria developed by Ministryof Labour, Invalid and Social Affairs (MoLISA) for monitoring short-termpoverty.
The report also found that gaps in education and healthcare amongsurveyed localities have been widening with the northern mountainousprovinces of Lai Chau and Đien Bien still being left behind.
Poverty was significantly higher in areas populated by ethnic minority communities, it said.
The signs of improvement in living conditions seen in rural areas hadto with improvement in toilets, waste management and the use of gasinstead of firewood for cooking.
Tarp recommended Vietnamese policymakers concentrate onnarrowing existing gaps and addressing inequalities to make sure thevulnerable in society have the support they need to better their lives.
On the other hand, Thomas Markussen of Copenhagen University,representative of the land research group, appreciated Vietnam’sefforts in improving the land tenure situation and acceleratinginvestments.
He emphasised the positive correlation between good land management andinvestment choices, a decrease in the disadvantages women experience inland ownership.
Nguyen Dinh Cung, head of CIEM, pointed to the significance of individual business households in attracting investment.
In comparison to the 2014 report, households with business licensesincreased by 29.5 percent while household production decreased by 56.2percent.
More than 58 percent of land was used for rice plantation andthe surveyed families typically sold 30 percent of their rice yield,the survey found.
Feasible plans
The poorest and most vulnerable groups still found it very difficult toaccess credit, the report said, adding that there were noticeabledifferences among localities in this regard.
Only 768 households of the 2,669 surveyed had obtained loans, a littleover 28 percent. It also found that credit access of ethnic minoritygroups was increasing, while that of the second-tier wealthy group(classified on the basis of criteria set by the Labour Ministry) wasdecreasing.
Cung said that rural households had to take present feasible plans to access loans.
“Credit is not only an approach to eradicate poverty in the short term.It is the momentum for better production and specialisation inagriculture.
Therefore, social organisations like the Women’s Union orFarmer's Union should carefully study rural households’ demands andinstruct them on efficient use of credit to end poverty and boostprosperity.
﷽ These organisations should also be a bridge connecting farmers with investors for better access to credit,” Cung suggested.-VNA
