Journal of Agricultural Economics and Development Vol. 6(4), pp. 033-043, June 2017 ISSN 2327-3151 ©2017 Academe Research Journals

 

Full Length Research Paper

Loan Utilization and Household Food Security in Rural Vietnam

Huong Thi Thu LE1, Hisamitsu SAITO2, Hiroshi ISODA3, Shoichi ITO3, Mitsuyasu YABE*4

1Faculty of Accounting and Business Management, Vietnam National University of Agriculture, TrauQuy Town, GiaLam District, Hanoi, Vietnam.

2Faculty of Public Policy, Hokkaido University, Hokkaido 060-0808, Japan

3Laboratory of Food and Agricultural Policies, Department of Agricultural and Resource Economics, Faculty of Agriculture, Kyushu University, Fukuoka 812-8581, Japan.

4Laboratory of Environmental Economics, Department of Agricultural and Resource Economics, Faculty of Agriculture, Kyushu University, Fukuoka 812-8581, Japan.

*Correspondence author. E-mail: yabe@agr.kyushu-u.ac.jp +81926422960

Accepted 21 May, 2017

Abstract

This study examined the utilization and amount of preferential loan contributed to the improvement in household food-insecurity in Vietnam. We collected primary data by the field survey that was conducted in July 2013 at three communes in Son Dong district, Vietnam. Among 1,136 households below the poverty line, we randomly selected 103 households. To measure household food security status, we used the method provided by USDA. The result showed that 56.31% of households in the district were food insecure. Logistic regression model was employed to determine factors influencing household food security levels. The results of the model found that, the positive impacts of share of the loans used for agricultural production on the food security status, but no significant impact in amount of the loan on it. This study also tried to explain the factors affecting loan utilization. We employed the generalized linear model to estimate the coefficients. We found that when amount of borrowed loan increases, households tend to use less loan for investing in production activities. Therefore, Vietnamese government can reduce its expenses on preferential credit programs without affecting the household food security status by carefully monitoring the use of the loans.

Key words: household food security, discount rate, preferential credit