Does access to finance improve household welfare?

In this paper, the author develops an econometric framework to analyze the effect of access to credit on the economicwelfare of households in Vietnam. The findings confirm that household credit contributes positively and significantlyto the economic welfare of households in terms of per capita expenditure, per capita food expenditure and percapita non-food expenditure. The positive effect of credit on household economic welfare is observed regardlessof whether they are poor or better-off households. The author also finds that credit has a greater positive effect onthe economic welfare of poorer households and finds that the age of the household head, the household size, landownership, and savings and the availability of credit at village level are key factors that affect householdborrowing. Some policy implications are drawn.