FINANCIAL ASSISTANCE TO THE POOR PEOPLE IN HOCHIMINH CITY _ A Thesis Presented to The Faculty of the Graduate School Tarlac State University Tarlac City _ In Partial Fulfillment of the Requirement for the Degree Doctor of Philosophy in Business Administration Major in Business Administration by PHAM DUC TRUNG March 2013 © 2013 PHAM DUC TRUNG ALL RIGHTS RESERVED Republic of the Philippines TARLAC STATE UNIVERSITY GRADUATE SCHOOL Tarlac City Awarded Level II (Accreditation Status by the Accrediting Agency of Chartered Colleges and Universities of the Philippines (AACCUP), Inc Tel.No.(045)982-2464,Local 232; Facsimile 982-0110; E-Mail stu@mozcom.com.ph APPROVAL SHEET This Dissertation of PHAM DUC TRUNG entitled “Financial Assistance To Poor People in Ho Chi Minh City,” which is prepared and submitted in partial fulfillment of the requirements for the Degree of Doctor of Philosophy in Business Administration, Major in Business Administrationt, is hereby accepted Dr.Charles H.Cranford, Ph D Dissertation Adviser DISSERTATION COMMITTEE GABRIEL S TABION, DPA Chairman PRISCILLA C VIUYA, Ph.D Member RODRIGO M SICAT, Ph.D Member Accepted and approved in partial fulfillment of the requirements for the Degree of Doctor of Philosophy in Business Administration, Major in Business Administration GABRIEL S TABION, DPA Dean, Graduate School Date: Acknowledgements First of all, I would like to thank all professor of Faculty of Economics in Tarlac State University at Hong Kong and Tarlac State University in Philippine where I had a change to complete the Ph.D course I thank to Dissertation supervisor Pro Dr.Charles H Cranford who led and supported me to achieve this thesis during the Ph.D course On the other hand, I thank to all my colleague and all my best friends that they introduced me to some district, ward government officer in Binh Chanh District , District 12 ,District and Go Vap District and some officers of Department of Labor, Invalids and Social Affairs where I completed the survey Beside, I would like to thank to all people who helped me some money and labor and then, they supported and encouraged enthusiasm to complete this thesis as soon as possible Finally, one more time, I would like to wish all people very happy and heathy Pham Duc Trung ABSTRACT Although Viet Nam is a developing country, there are still a lot of poor households in big cities, such as Ho Chi Minh City So we must have many solutions to help the poor out of poverty One of the typical solutions to improve the poor household capital is to provide access to credit resources, however, there are many barriers blocking the poor people access to credit Therefore, this thesis will begin the importance of credit during the economic transition in Vietnam Next, the thesis gets to know factors affecting credit participation and credit constraints for the poor in the urban areas and investigates whether credit participation impacts the poor education and healthcare spending and benefits others Besides, this thesis uses five large datasets of Vietnam Household Living Standard Surveys issued in 1998, 2002, 2004, 2006 and 2008 by Vietnam General Statistics Office to find the rate of the poor people in Ho Chi Minh City ,Vietnam over the period of 1998 – 2008 The thesis finds that the rate of the poor household had increased quickly during the recent economic reform and reached around 8-10 percent and the thesis help us to know an increasing importance of education in earnings during the later part of the economic transition in Vietnam So, human capital investment, including healthcare and education, really need to help the poor escape poverty since they rely heavily upon labor income, especially in urban and peri-urban areas The thesis too uses a novel dataset that was collected by the author from periurban areas of Ho Chi Minh City, Vietnam in 2008 to investigate how the poor use their loans and factors affecting their credit participation and credit constraints Then, the thesis finds the presence of many commercial banks in the areas not help the poor, who rely heavily on informal credit Loans in the urban areas are mainly used for nonproductive purposes, which stressed the importance of consumption smoothing motives Furthermore, households in more peri-urban wards had a higher probability of borrowing than more urban households, thanks to better community relationships and interpersonal trust Competition by borrowing neighbors adversely affected the opportunity for borrowing in urban wards where the poor households ‘borrowing rely more on subsidized credit funds A clearly look at specified micro-credit sources indicated that the household behavior is different in each market segment Further, the poor are highly creditconstrained Wealthier households, in terms of asset holdings and phone possession, appeared less credit-constrained However, except in the most peri-urban part of the study area, the likelihood of credit constraints have increased with distance to the nearest banks, which suggested that supply-side intervention, can help in overcoming credit constraints Overall, the poor people in urban and peri-urban wards were more credit-constrained because of exclusion by commercial banks and weak interpersonal trust Given that a sizeable fraction of the poor people had participated in credit activities, there was a debate about whether micro-credit had positive impacts on education and health for borrowing households TABLE OF CONTENTS Page Approval Sheet i Acknowledgement ii Abstract iii Table of Contents v List of Tables vi List of Figures vii CHAPTER I THE PROBLEM AND ITS BACKGROUND Introduction Objectives of the Study Statement of the Problem Statement of Hypothesis 10 Importance of the Study 11 Scope and Delimitation of the Study 16 II REVIEW OF RELATED LITERATURE AND STUDIES Review of Related Literature 17 Review of Related Studies 18 Conceptual Framework 38 III METHODS OF STUDY AND SOURCES OF DATA Introduction 39 Research Design 44 Description of sampling 45 Population of the Study 45 Sampling Design 47 Methods of Gathering Data 48 Statistical Treatment 49 IV PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA Description of the income data 57 Factors impact on the poor household 66 Scale testing 92 IV SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS Results and Summary of finding 100 Limitation of the study 103 Recommendations for future study 104 Conclusions 106 BIBLIOGRAPHY 109 APPENDICES 114 CURRICULUM VITAE LIST OF TABLES Table 3.1: The list of the surveyed areas at Ho Chi Minh City 50 Table 3.2: Purpose of Loans of the poor households 52 Table 3.3: The commodity summary of the price movement effects on 53 Table 3.4: Total of consumption expenditure of the population group 54 Table 4.1: Yearly GDP per capita over years 59 Table 4.2: Monthly income per capita by (urban, rural, region, sex of household head) income quintile 60 Table 4.3: Monthly average income per capita by (urban, rural , region, sex of household head )income quintile in Ho Chi Minh City(HCMC) 61 Table 4.4: Monthly average consumption expenditure per capita 62 Table 4.5: Monthly structure of average consumption expenditure per capita 62 Table 4.6: The relationship between the poor standard and monthly consumption expenditure in Ho Chi Minh city 64 Table 4.7: Age group of the household members by region and by income 68 Table 4.8: Age group of the household members by sex and by income 70 Table 4.9: Educational level of the household members 72 Table 4.10: Proffesional Level of the household members 73 Table 4.11: Employment changing status in the last years by gender 73 Table 4.12: The rate of employment change by gender and households 74 Table 4.13: Working changing status before and after 75 Table 4.14: Employment status by gender and age 76 Table 4.15: The employment changing situation of the poor 77 Table 4.16: Work position before and after changing ……… 78 Table 4.17: The situation of workplace changed by gender and age group 79 Table 4.18: Educational level of the workplace changing people 80 Table 4.19: The situation of extra employment by sex and age group 82 Table 4.20: The income status of main employment by economic 83 Table 4.21: The income status of extra employment by economic 85 Table 4.22: Income status from other sources according to economic 86 Table 4.23: Total income of households by economic status 86 Table 4.24: Comparison of the average expenditure level of the poor households and the average expenditure level of whole Ho Chi Minh City 88 Table 4.25: Comparison of the expenditure level of the poor households by income groups and the general expenditure of whole Ho Chi Minh City 90 Table 4.26: Increased price affect on expenditure of native poor household group by ranking priority of expenditure scale ( RPES) 92 Table 4.27: The expenditure level of native poor household group by ranking priority of expenditure scale (RPES) 93 Table 4.28: Increased price affect on expenditure of the immigrant worker group by ranking priority of expenditure scale (RPES) 94 Table 4.29: Increased price effect on expenditure of the immigrated free worker group by ranking priority of expenditure scale ( RPES) 95 Table 4.30: Increased price effect on expenditure of the native free labor group by ranking priority of expenditure scale (RPES) 96 Table 4.31: Increased rice affect spending by retired civil officer group by ranking priority of expenditure scale (RPES) 97 Table 4.32: Increased price effect on the group of workers and employees with an average income by ranking priority of expenditure scale (RPES) 98 Accommodation: In Binh Chanh ward, Binh Chanh district and Hiep Thanh Ward, District 12; the group of migrant workers are less likely to feel the pressure of increased accommodation price is also low In ward of district has the highest price of accommodation in HCM city so the increased price affected the living condition of migrant workers Fuel: increased price of fuel is less influenced by group of migrant workers in Hiep Thanh Ward, District 12 because migrant workers mainly work in Tan Thoi Hiep Industrial Park, District 12 (it is located in Hiep Thanh ward) Accommodation price on 5/2011 in District 12 is about 350.000 VNĐ / room, in Binh Chanh district is 250.000 to 300.000 VNĐ / room; in Go Vap district is 400,000 to 500,000 VNĐ / room and District is from 800.000 to 1.000.000 VNĐ / room At District 12, Go Vap has the campaigned of the motel and room for rent not increased in march/2011, but in the fact, almost head of a household has increased earlier in the first year of 2011 or on the occasion of Vietnam traditional Tet Meanwhile, other areas many migrant workers rent accommodation in the survey area and everyday they have to ride a bike to come to the workplace, it is far from here, so increased fuel price affected on this group Table 4.29: Increased price effect on expenditure of the immigrated free worker group by ranking priority of expenditure scale ( RPES) Ranking Binh Chanh ward, Binh Hiep Thanh Ward, District Ward 17, Go Vap priority of Chanh District 12 District Medicine & health service Meat, fish expenditure Scale Schooling fee Electric Rice Rice Fuel Meat, fish Electric Meat, fish Other food Medicine & health 95 service Rice Accommodation Schooling fee Resource: the survey of the poor household, 2012(RPES) Group of free labor migrants are more concerned to the price of fuel (petrol, gas, electricity) and the price of foodstuffs (meat, fish, rice) Fuel price is the most interested because free labor migrants often have to ride a bike to move to urban areas every day or other dense populated areas to look for a job Table 4.30: Increased price effect on expenditure of the native free labor group by ranking priority of expenditure scale (RPES) Ranking Binh Chanh ward, Binh Hiep Thanh Ward, District Ward 17, Go Vap priority of Chanh District 12 District expenditure Scale Schooling fee Medicine & health service Meat, fish Electric Rice Rice Fuel Meat, fish Electric Meat, fish Other food Medicine & health service Resource: Rice Accommodation Schooling fee the survey of the poor household, 2012(RPES) 96 Group of native free labors are more concerned to the fuel prices (electricity, gas, gas, coal) than the price of foodstuffs With petrol, they are interested in because it served the need of work and their daily activities; petrol is goods that motorcycle taxi groups, motorcyclists used to take some goods and passenger and bus are the direct effect of fuel prices.Native free labor group often live with their family, they often buy equipment and furniture and it leads to large power consumption In addition, some people specialize in food services and also need to use more gas / electric such as: gas to sell for the group of foodstuff Table 4.31: Increased rice affect spending by retired civil officer group by ranking priority of expenditure scale ( RPES) Ranking Binh Chanh ward, Binh Hiep Thanh Ward, District Ward 17, Go Vap priority of Chanh District 12 District expenditure Scale Schooling fee Medicine & health service Meat, fish Electric Rice Rice Fuel Meat, fish Electric Meat, fish Other food Medicine & health service Rice Accommodation Schooling fee Resource: the survey of the poor household, 2012(RPES) 97 For the pension officer group reduced shopping their personal.The limitation of electricity power use is also used how to apply almost the family of pension when power price is high Most of retired officers often live with their children therefore electrical fittings use in the family so much In survey areas of the wards, some people said that from early 2012, they had to reduce entertainment activities such as participating in spring festivals, visiting friends to tighten expenditure Civil worker with an average income Groups of civil workers and employees with level of average income(2-5 millions / month) depend on career field, education level and years of experience Most the group of civil workers in this survey have high school level and over in that there are people work in owned-state agencies and enterprises This groupis less influenced by the increased price compared with other groups, mainly so their family has also other income sources (room for rent, the selling shop…) Table 4.32: Increased price effect on the group of workers and employees with an average income by ranking priority of expenditure scale ( RPES) Ranking Ward ,District Hiep Thanh ward,District 12 Ward 17, Gò Vấp district Meat, fish Fuel Fuel Electric priority of expenditure Scale Construction Materials Gas Medicines and health services Meat, fish Eating outside service Beverage and tobacco Gas Electric Fuel Other foods Meat, fish Resource: the survey of the poor household, 2012(RPES) 98 Ranking priority items also effect on the differences between the survey areas: Fuel effects on civil worker groups at Hiep Thanh Ward, district 12 and Ward 17, Go Vap district because the need to travel is quite so large, many people have to ride a bike to the city to work Meanwhile ,the group of civil workers at Ward district are affected less than the price of fuel, therefore almost civil officers work at the local, less people work remotely Building materials: civil officer group at District 12 are more interested in increasing prices of construction materials because Hiep Thanh ward is a suburban area in the process of urbanization Eating outside services , beverages and cigarette: in HCM City, the price of these commodities effected on civil official group To explain this, according to the ward staff said that because men have eating outside habits external, to make friend and colleague To reduce personal shopping and electricity use in the family activities are the two methods that group of civil officer worker with an average income level is the ranking priority at survey areas Spending for personal shopping of the group of civil officer, special civil officer woman, in generally is higher than other population groups because these groups are often at work and are more in touch with social However, when the commodities prices rise, many people have "reduced the personal shopping." group of civil officer are often equipped with home and person appliances are quite full This device with power consumption is quite large, so when electricity prices rise, most of them selected the method "to reduce electricity use," special civil officer group rent the accommodation, often use higher electricity prices 99 Chapter SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS Introduction From the results of research findings from previous chapters, Chapter will present the conclusions of the need of the poor household capital towards their jobs Then take out some of recommendations regard to People Credit Funds, an ownedstate bank of Viet Nam and Government Finally, some of the limitations of this thesis and the development of research in the future Results and Summary of findings 100 Although in many developing economic there have been great progresses in economic development over the last 20 years, millions of the poor people and lowincome households, who are just around the poverty line, rely heavily upon microcredit, especially informal credit, as primary sources of credit to meet their demand for credit The existence of an informal credit sector in almost all of the economies around the world especially in developing countries is the reality and reflects the failure of formal financial markets to meet poor clients‟ financial needs Understanding the determinants of access to informal credit and its impacts compared with the impacts of formal credit is thus an important topic, which is the rest of this thesis addresses Examining factors affecting credit participation and credit constraints in periurban and urban areas in HCM city reveals: First, the presence of many commercial banks not help the poor people to access to formal credit, and thus the poor people in the peri-urban and urban areas rely heavily on informal credit Furthermore, unlike the usage loans in the peri-urban and urban areas are mainly used for consumption Second, the poor households in peri-urban wards have a higher probability of borrowing than their counterparts in the urban wards because of better social relationships in peri-urban areas Moreover, competition from borrowing neighbors adversely affect the propensity of borrowing only in urban wards where the poor people depend more on government subsidized credit funds, which are limited Next, a closer look at specified micro-credit sources reveals that the roles of marital status, communication facilities, dwelling places, and competition from neighbors vary across different credit market segments Accordingly, married-head households tend to avoid informal credit, whereas the better-communicating households borrow more from formal credit lenders Households far away from banks were unable to borrow 101 from the formal credit resources; however, these poor households in peri-urban areas were more likely to borrow from informal credit lenders Moreover, the competition among the poor households exists only in formal credit markets which provide mostly subsidized credit loans Overall, pooling formal and informal credit market segments would blur the picture of determining factors of credit participation Furthermore, wealthier households in terms of asset holdings and phone ownership among the poor group appear less credit-constrained The likelihood of both credit participation and credit constraints increases with distance to the nearest banks, which implies that households living far away were able to borrow but their credit amounts were less that their optional amounts since they mainly borrowed from informal (and also small) credit This suggests that supply-side intervention could help in overcoming credit constraints Overall, the poor in urban wards are slightly more credit-constrained due to exclusion by commercial banks, and by informal credit presumably due to weak community relationships and interpersonal trust There remain some caveats in this study; the determinants of credit participation and constraints would come from the unobservable attributes such as household entrepreneurial ability, attitude to risks, and access to social networks, which are assumed to be associated with pre-survey incomes and assets in this study Further advances on the current research should control for these attributes by employing fixed effects methods on survey data to confirm the finding The estimates by RPES and VHLLS uncover that household credit impacts negatively and significantly on the budget share of food, whereas it affects positively on non-necessity goods, especially on education and healthcare expenditure groups Contrary to a common belief that the poor often think of eating and other daily spending on necessity goods when they have money on hand, especially a marginal 102 dollar, this study shows that the poor obviously give more priority to human capital spending than current eating, especially households whose budget shares for education and healthcare are relatively low prior to credit participation Education and healthcare budget shares increased when the poor borrowed Therefore, easing access to credit sources is likely to help steadily alleviate poverty in future due to the poor improved human capital Treatment effects can vary widely, not only across subgroups but also along the distribution of outcomes This chapter provides evidence where my sample design is all under the poverty line of about 20.000VNĐ (US$1) per day and would typically be considered one identifiable sub-group, for whom an average treatment effect would be estimated Yet I find some heterogeneity in treatment effects within this seemingly homogenous sample, which would be hidden if only an average treatment effect is reported Specifically, the RPES estimator provides clearer evidence of the effects than the VHLLS counterparts for the healthcare budget share From a policy point of view, this suggests that facilitating access to credit sources could be a significant factor in improving the health of the urban and peri-urban poor This study also evaluates the impact of household credit on education of the poor households in the peri-urban and urban areas in Ho Chi Minh City Limitations of the study Research on the impact of household credit on the living condition, the income and education of the poor households in the peri-urban and urban areas in Ho Chi Minh City, one of the poverty reduced targeted of Ho Chi Minh, the City is the largest economic center in Viet Nam Comparison of the proportion of the population, my number of designing samples is relatively small, 300 households However due to the limitations of human and financial resources and then this study can only collect the 103 number of such samples Thus there is also a need to have the study with a larger designing sample for this thesis because the greater sampling size is the higher precision of this study In addition, this thesis research can exactly reflect more exactly in reality and then the selection of template may focus on the major city, crowed population households At the same time, the expansion of the geographical scope is not only limited in Ho Chi Minh city but also whole Vietnam is also needed, in which the members of the poor households in other big cities such as Binh Duong, Hanoi, Hai Phong, Da Nang, can tho…should also be included in this survey Results of factor analysis and expenditure test of RPES and VHSSL showed that factors effect on living conditions, income and education really affect the need of the poor household capital credit This study is limited by the objects of research are the capital credit for the poor households and the scope of study is Ho Chi Minh City but we also can use the results of this study to make the material for the research of analyzing the credit capital for the poor households in Ha Noi, Hai Phong or other cities As mentioned in the questions of this study, the ultimate aim of the poor household is how to access the credit capital for the poor people in Ho Chi Minh City and it is reality to meet them needs There needs to be more research on factors that influence the workplace of the poor household members as well as the factors that influence the intended to leave, or change workplace into other places are much better Recommendations for future study The need for further study in this field and the recommendations for such by the researcher is based upon the review of the literature and the findings from this study The emergent topics from the research point how to the poor people in Ho Chi 104 Minh City to access the credit capital of credit Funds or the commercial banks contribute to the success of a transition, but how they also affect the educational level, working condition, living condition Given this observation, additional research is recommended on how professional level the impact of the need of the capital credit for the poor during transitions Future research should take into account some of the limitations in this thesis as following below: First, one may think about possible endogenously of education due to unobservable individual ability and the methods which fail to control for schooling quality that could lead to bias in the estimated returns to education and living condition Another approach, though it may be harder to find data for, is to use parents‟ education to predict wage-earner”; this approach could be applied to younger groups of the sample, but for the older groups, their parents‟ education data” would be unavailable in Ho Chi Minh City Second, credit participations and constraints can also be determined by unobservable attributes such as households‟ entrepreneurial ability, attitude to risks and access to social networks In the current questionnaire used for collecting data for this thesis, I designed some questions (in the survey) to capture the access to social networks, but the “yes/no” some questions did not reflect fully the access to social networks Future studies should design questions to represent levels of households‟ actual contribution or involvement in the social networks, and to measure entrepreneurial ability and attitude to risk, which will enable researchers to control for influences by these variables and confirm the current thesis findings Future research may also use the instrumental variable method to overcome the endogenously problem Distance to the bank is commonly used as instrumental 105 variables in the literature, but it does not work in peri-urban and urban areas because distance affects both credit participation and the results (since banks and services are clustered together) Therefore, future research should look for appropriate instrumental variables for peri-urban areas, for example, access to credit information could be a better instrumental variable than the distance to the nearest bank Third, future studies also need to investigate impacts on child academic performance, higher education and other health indicators such as height for ages, malnutrition rate, etc to confirm the effect findings Finally, the designing sample used in this thesis is likely to be representative of the poor group whose initial income per capita is below the poverty line at the survey time in this particular district but not necessarily for Ho Chi Minh City or for Vietnam In the future if resource suffice and then one should enlarge the sample size and cover of survey areas to some other peri-urban districts of HCMC, then the result will be representative of both the poor people in HCMC and Vietnam as a whole because HCMC is the fastest urbanizing and biggest city in Vietnam Conclusions This thesis has examined how the poor people in peri-urban and urban areas of Ho Chi Minh City access credit and the impacts of that credit on living condition, education, healthcare spending, age and income It delivers the following conclusions: First, the small sized and short-term loans fail to help improve the poor education Second, the effect of household credit varies across the gender Women are more likely to receive more education investment and more extra job at work The finding contrasts with the existing literature on the differences in man-woman 106 education impacts in Ho Chi Minh City, which indicates that micro-credit benefits boys more than girls or affects girls more adversely than boys Furthermore, evidence of the traditional view of „boys over girls‟, even though it is common in other similar developing countries, was not observed in this peri-urban and urban area of HCMC Third, a closer look at impacts of each credit source reveals that formal credit has brought beneficial effects to education, healthcare, income, expenditure, while informal credit has failed to so Consequently, to improve education and living condition in the long term needs to ease access to formal credit for the poor people Otherwise, the poor people will continue to rely on informal credit and will end up in debt Therefore, informal credit may exacerbate poverty in the long term rather than help the poor people out of the poverty The poor people are both income and credit constrained, so government interventions such as facilitating formal credit access are needed ( Caucutt & Lochner, 2005).The poor people need a “big push” to break down the vicious circle of poverty Providing subsidies or tuition exemption to all school is an impossible solution in poor countries like Ho Chi Minh City, Vietnam since it may pose a burden on the government budget An alternative is to target subsidies to low-income household education In fact, the current tuition exemption policy in Ho Chi Minh city is ineffective to help the poor people because the tuition accounts for just less than one third of total education costs and the poor household income levels In Ho Chi Minh, the greater education expenditure, which is influenced by the poor household budget constraints, may relate to obtaining higher quality education and better academic performance from participating in extra classes (Dang, 2007) Therefore, credit still has an important role in education investment However, regulated tuition levels by the government could partly undermine the effects of credit 107 on education Such examination is needed because as shown in the thesis, the role of education in earnings has become much more important during the transition to a market economy in Ho Chi Minh City The rate of return to schooling in Ho Chi Minh City has increased quickly The increase in the rate of return to schooling and the demand for skilled workers provides an exit from poverty for the poor in urban and peri-urban areas who rely heavily on labor income But to use this exit they need to invest more in human capital, such as healthcare and education One way for the poor people to increase their investment in human capital is through micro-credit, but the poor in peri-urban areas are highly credit-constrained and rely heavily on informal credit There is distinction in borrowing behaviors between the poor households in peri-urban and urban wards in the areas of Ho Chi Minh City In urban wards, the poor people depend more on limited and subsidized funds from the government and are less likely to borrow from informal credit which provides loans based mainly on interpersonal trust rather than collateral The poor households in peri-urban areas who live further away from banks find it easier to borrow, while the poor households in urban areas living near banks have a lower probability of borrowing and are more credit-constrained There are two main possible reasons: the first is mutual help among people in peri-urban areas where they have better interpersonal trust, while this trust is weak in urban areas; the second is complicated procedures such as lending procedures and property ownership certification blocking the poor people from credit resources Apart from loans from government funds, the poor people are almost always excluded from other formal credit resources Although the poor people are highly credit-constrained, a sizable proportion of them have obtained credit, from either government subsidized or informal credit sources This credit participation has positive and significant effects on the poor household (Kim 2004) provides a good 108 example of the complicated procedure required by HCMC government to obtain certificates of land and house ownership 109 [...]... to support the poor people In reality; financial assistance for the poor people in Ho Chi Minh City is too few; while the poor people were too much, therefore, the number of poor people are entitled to support from the financial resources or other sources that are described in the following groups: Native poor group The group of migrant worker The group of native freelance-workers The group of pension... households to diversify their income sources, increase their financial confidence, and to manage their economic production more efficiently In really, financial resources do not have enough provides for the poor that is the mainly cause in Ho Chi Minh City As we know, the effects of the financial assistance to the poor households are much needed The economic growth is only considered the successful, the sustainable... average income 6 Financial assistance will be based on the poverty line in Ho Chi Minh City, because determining who are the poor household Poverty levels are considered poor and then the poverty alleviation programs had served for the poor people exactly Recently, local government announced the form of sustainable poverty reduction in HCMC .The City developed the People' s Credit Fund to help the poor. .. authorities handle the number of poor households and how much they were supported and then financial institutions to reach the poor households how much are In summary, Ho Chi Minh City has shortened the distance, pulling down the difference in living standards between the rich and the poor in population groups What are the poor people? Poor is understood simply as shortages, inability to meet necessary... a segment of the population out of poverty, contributing to an important market to promote economic development The implication of the study is rationale of determining the poverty line in Ho Chi Minh City, includes the level of economic development and living standards This study aimed to help the poor people out of poverty in Ho Ch Minh City, improve in the present and the future Further, it helps... can help poor people increase income and create sustainable business activities and reduce their vulnerability shocks from outside Credit capital is a powerful tool to help the poor, especially women, strengthen the economic power and become the economic subjects The roles of credit capital in improving the living standard for the poor people and low-income households and its position in the financial. .. but also the second fastest growing population in Vietnam (3.5%/year) during the last 10 years Furthurmore, the fact that the fastest growing province of Binh Duong is adjunct to HCMC makes HCMC is the most dynamic population areas in Vietnam The main reason for migration to the region is to seek economic opportunities in nonagricultural sectors Most migrants to the region arrive in Ho Chi Minh City (HCMC... is the supply for poor households is very small loans, aimed at helping them to engage in production activities, or initiate smaller business activities Credit capital is often accompanied by a range of other services such as credit, saving, insurance, because of the poor people and very poor have a huge demand for financial products, but they can not access the formal financial institutions These financial. .. person, the amount is considered to have enough to buy the needed products to survive." Viet Nam's research group in "Poverty Reduction Program in Vietnam-1995" had a definition: "Poverty is the lack of ability to participate in national life, especial involved in the economic field.” Financial assistance is a broader concept; it is defined as small-scale financial services to the poor people and low-income... micro-credit Taking all the borrowers of these providers or sources together adds up to more than 65 % of total borrowing households 1 Micro-credit, including formal and informal sectors has substantially provided credit or small loans to the poor and low income households worldwide including Vietnam Micro-credit on the poor remain debatable.So, this thesis seeks to empirically study the impacts of