Microcredit and Gender: Credit Access for Women-Managed Rural Businesses in Vietnam and Thailand
A study co-authored by Chung Thanh Phan (HAPRI Research Associate), Diem Thi Hong Vo, Nguyen Nhan Thien and Daniel Borer finds no evidence of discrimination against women in credit access among rural entrepreneurs running non-farm businesses in Vietnam and Thailand, and some evidence of moderate discrimination favoring women. Comparing the two countries' microcredit policies, it also suggests that Vietnam's interventionist approach may be more effective in supporting wealth accumulation than Thailand's more liberal, market-oriented model.
Context
Access to finance is critical for rural non-farm self-employment businesses in Southeast Asia, but financial constraints and gender discrimination impede their growth. The paper notes that over 90% of the poor in Vietnam, and 79% in Thailand, live in rural areas. Existing studies of gender disparities in access to credit have looked mostly at urban SMEs in developed and middle-income countries, and very few have focused on rural, non-farm household enterprises in Southeast Asia.
The study also compares two distinct rural credit models: Vietnam's interventionist, state-subsidized approach, and Thailand's more market-oriented, commercially driven system.
Methods
The authors investigate credit access challenges for female-managed non-farm businesses among rural entrepreneurs, using six survey waves of a household panel conducted between 2007 and 2017 in Buri Ram, Ubon Ratchathani and Nakhon Phanom in Thailand and in Ha Tinh, Thua Thien Hue and Daklak in Vietnam. To address sample selection bias, they use a two-step Heckman model in which a selection equation models the household's decision to apply for a loan, with valid instrumental variables addressing bias and endogeneity.
Key findings
The study finds no evidence of discrimination against women in credit access.
Some evidence points the other way, suggesting moderate discrimination favoring women.
Comparing the two countries' microcredit policies, the study suggests that Vietnam's interventionist approach may be more effective in supporting wealth accumulation than Thailand's more liberal, market-oriented model.
Vietnam's model is associated with broader access, lower interest rates and more favorable loan terms, particularly for female borrowers, though the authors stress that these outcomes should be interpreted with caution.
Policy implications
The authors highlight the need for context-specific policy choices, and for credit interventions to be assessed not only on short-term access outcomes but also on long-run sustainability, efficiency and borrower behavior.
Keywords:
Microcredit
Gender
Credit Access
Rural Households
Non-Farm Self-Employment
Vietnam
Link:
Citation:
Phan, C. T., Vo, D. T. H., Thien, N. N., & Borer, D. (2025). Novel Insights for Successful Microcredit Policies and Gender Dynamics: A Comparative Study of Rural Entrepreneurs in Vietnam and Thailand. Review of Development Economics, 30(2), 865-881.
