Can microcredit reduce vulnerability to poverty? Evidence from rural Vietnam

Extant literature has extensively explored microcredit's impacts, confirming its essential role in poverty alleviation. However, most studies focus on measures that exclusively emphasize current status without adequately addressing the potential of falling into or remaining poverty. Furthermore, credit services helping poor rural areas appears to be underexamined literature. To address this knowledge gap, study investigates whether microcredit can reduce household vulnerability A theoretical framework is developed capture mechanism by which borrowing a vital businesses and impacts probability being future. The Vietnam Access Resources Household Survey data set from 2008 2016 used explore issue. findings indicate Vietnam's access significantly reduces Moreover, better-off households are seemingly effective at using microcredit, whereas opposite found among worse-off households. These results robust propensity score matching method.