The effect of financial inclusion on multidimensional poverty: the case of Vietnam

Figures & data

Diagram 1. The role of FI in poverty reduction.

Table 1. Multidimensional poverty measurement

Dimensions	Indicators	Deprived if
Education	Adults’ education	The household has at least one member aged 15 years or older who has not graduated from the lower secondary school and is not currently attending school
	Children’s schooling	The household is with at least one member aged 5 to under 15 years who is not currently attending school
Medical services	Access to medical services	The household has a member being sick but does not receive medical care (sickness is defined as a serious illness/injury requiring bed rest and someone to take care off or being absent from work/school, or being unable to participate in normal activities)
	Health insurance	The household has at least one member aged 6 years or older who does not currently have health insurance
Housing	Quality of housing	The household lives in a house or apartment that is not permanent and is inconvenient
	Housing area per capita	The average housing area per capita of the household is less than 8 m^2
Clean water and sanitation	Domestic water source	The household does not have access to hygienic water sources
	Type of latrine	The household does not use hygienic latrines
Access to information	Using telecommunications services	The household has no member using telephone and internet subscriptions
	Properties for accessing information	The household has none of the following assets: television, radio, computer; and no access to the commune/village loudspeaker system

Table 2. Measurements of the variables

Aspect	Variable	Symbol	Measurement
Multidimensional poverty	Multidimensionally poor households	MPH	= 1 if the household is a multidimensionally poor household = 0 if otherwise
Financial inclusion (FI)	Household with a bank account	BAC	= 1 if the household owns (a) bank account(s) = 0 if otherwise
	Household with bank savings	SAV	= 1 if the household has bank savings = 0 if otherwise
	Household that use an ATM card	ATM	= 1 if the household uses (an) ATM card(s) = 0 if otherwise
	Household that uses a credit card	CRE	= 1 if the household uses (a) credit card(s) = 0 if otherwise
	Household investing in stocks or bonds	STOCK	= 1 if the household has invested in stocks or bonds = 0 if otherwise
Area	Residential area of the household	ARE	= 1 if a household lives in urban area = 0 if otherwise
Household size	Household size	HSIZE	Number of people in the household
Communication	Access to information on production and business (INF)	INF	= 1 if the household has received production and business information from the commune radio system = 0 if otherwise
Gender	Gender of household head	SEX	= 1 if the household head is female = 0 if the household head is male
Age	The age of the household head	AGE	The age of the household head
Marital status	The marital status of the household head	MAR	= 1 if the household head has a spouse = 0 if otherwise
Education	The education of the household head	HEDU	= 0 No degree = 1 Primary school = 2 Secondary school = 3 Undergraduate degree = 4 Postgraduate degree
Real estate	The household having a plot of land or other housing other than the current residence.	EST	= 1 if the household has a plot of land or other housing in addition to the current residence = 0 if otherwise

Table 3. Descriptive statistics of the variables

	Total sample	Multidimensionally non-poor households	Multidimensionally poor households
Number of households	2760	2625	135
BAC
1: Household has (a) bank account(s)	779 (28.2%)	776 (29.6%)	3 (2.2%)
0: Otherwise	1981 (71.8%)	1849 (70.4%)	132 (97.8%)
SAV
1: Household has bank savings	384 (13.9%)	384 (14.6%)	0 (0%)
0: Otherwise	2376 (86.1%)	2241 (85.4%)	135 (100%)
ATM
1: Household uses (an) ATM card(s)	1100 (39.9%)	1095 (41.7%)	5 (3.7%)
0: Otherwise	1660 (60.1%)	1530 (58.3%)	130 (96.3%)
CRE
1: Household uses (a) credit card(s)	70 (2.5%)	70 (2.7%)	0 (0%)
0: Otherwise	2690 (97.5%)	2555 (97.3%)	135 (100%)
STOCK
1: Household has invested in stocks or bonds	11 (0.4%)	11 (0.4%)	0 (0%)
0: Otherwise	2749 (99.6%)	2614 (99.6%)	135 (100%)
AREA
1: Urban area	788 (28.6%)	771 (29.4%)	17 (12.6%)
0: Rural area	1972 (71.4%)	1854 (70.6%)	118 (87.4%)
HSIZE
Mean (SD)	4.02 (1.43)	4.01 (1.42)	4.33 (1.64)
Median [Min, Max]	4.00 [1.00, 10.0]	4.00 [1.00, 10.0]	4.00 [1.00, 9.00]
INF
1: Household has received production and business information from the commune radio system	1548 (56.1%)	1492 (56.8%)	56 (41.5%)
0: Otherwise	1212 (43.9%)	1133 (43.2%)	79 (58.5%)
SEX
1: Male	2118 (76.7%)	2015 (76.8%)	103 (76.3%)
0: Female	642 (23.3%)	610 (23.2%)	32 (23.7%)
AGE
Mean (SD)	50.4 (11.7)	50.6 (11.5)	45.5 (14.3)
Median [Min, Max]	50.0 [17.0, 98.0]	50.0 [17.0, 98.0]	42.0 [24.0, 95.0]
MAR
1: Household head has a wife or husband	2313 (83.8%)	2207 (84.1%)	106 (78.5%)
0: Otherwise	447 (16.2%)	418 (15.9%)	29 (21.5%)
HEDU
0: No degree	382 (13.8%)	347 (13.2%)	35 (25.9%)
1: Primary	747 (27.1%)	688 (26.2%)	59 (43.7%)
2: Secondary school	1413 (51.2%)	1372 (52.3%)	41 (30.4%)
3: Undergraduate degree	39 (1.4%)	39 (1.5%)	0 (0%)
4: Postgraduate degree	179 (6.5%)	179 (6.8%)	0 (0%)
EST
1: Household has a plot of land or other housing in addition to the current residence	61 (2.2%)	61 (2.3%)	0 (0%)
0: Otherwise	2699 (97.8%)	2564 (97.7%)	135 (100%)

Table 4. The impact of financial inclusion and control variables on multidimensional poverty in Vietnam

Dependent variable: Multidimensional poverty (MPH)
Explanatory variables	Household with bank accounts (BAC)		Household with bank savings (SAV)		Household with ATM cards (ATM)		Household with credit cards (CRE)		Household invested in stocks/bonds (STOCK)
	Panel probit	Mvprobit	Panel probit	Mvprobit	Panel probit	Mvprobit	Panel probit	Mvprobit	Panel probit	Mvprobit
BAC	−1.515* (0.346)	−1.105* (0.253)
SAV			0 (omitted)	−4.126* (0.113)
ATM					−1.719* (0.320)	−1.162* (0.208)
CRE							0 (omitted)	−3.822* (0.302)
STOCK									0 (omitted)	−3.003* (0.235)
ARE	−0.519** (0.257)	−0.288** (0.134)	−0.665** (0.268)	0.371* (0.128)	−0.508** (0.261)	−0.285** (0.135)	−0.761* (0.269)	−0.421* (0.125)	−0.774* (0.270)	−0.426* (0.125)
HSIZE	0 .207* (0.065)	0 .125* (0.035)	0.175* (0.066)	0.096* (0.034)	0.239* (0.067)	0.142* (0.034)	0.172* (0.066)	0.095* (0.033)	0 .170** (0.066)	0.092* (0.033)
INF	−0.459* (0.164)	−0.309* (0.092)	−0.490* (0.169)	−0.313* (0.091)	−0.421** (0.167)	−0.282* (0.093)	−0.493* (0.169)	−0.316* (0.090)	−0.497* (0.169)	−0.319* (0.090)
SEX	0 .048 (0.277)	0 .017 (0.149)	0.101 (0.286)	0.042 (0.144)	0 .013 (0.283)	−0.005 (0.151)	0 .111 (0.287)	0.049 (0.143)	0 .117 (0.287)	0.056 (0.142)
AGE	−0.036* (0.009)	−0.022* (0.005)	−0.036* (0.009)	−0.021* (0.005)	−0.033* (0.009)	−0.020* (0.005)	−0.037* (0.009)	−0.022* (0.005)	−0.038 (0.009)	−0.022* (0.005)
MAR	−0.718** (0.316)	−0.423* (0.158)	−0.697** (0.328)	−0.377** (0.153)	−0.711** (0.322)	−0.408** (0.160)	−0.717* (0.330)	−0.386** (0.153)	−.7290** (0.331)	−0.393** (0.152)
HEDU	−0.488* (0.115)	−0.270* (0.051)	−0.542* (0.120)	−0.291* (0.049)	−0.444* (0.118)	−0.238* (0.054)	−0.571* (0.121)	−0.305* (0.048)	−0.578* (0.122)	−0.310* (0.047)
Constant	−0.336 (0.518)	−0.081 (0.297)	−0.383 (0.538)	−0.086 (0.289)	−0.519 (0.528)	−0.195 (0.295)	−0.325 (0.538)	−0.056 (0.288)	−0.300 (0.539)	−0.037 (0.285)
Log likelihood	−423.7463	−1885.622	−430.086	−1448.017	−413.372	−2047.674	−437.739	−763.700	−438.608	−535.178
Wald chi2	55.63	493.81	41.82	328.20	55.96	553.52	43.99	170.57	44.37	1074.47
Pro> chi2	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000	0.000	0.000	0.000	0.000
LR test of rho = 0
Chi2(01)	65.99		75.98		62.97		79.38		80.12
Pro> chi2	0.000		0.000		0.000		0.000		0.000
Likelihood ratio test of rho21 = 0
chi2(1)		0.046		0.189		0.179		0.222		1.326
Prob > chi2		0.830		0.663		0.672		0.638		0.250

Standard error in parentheses; * indicates significant at the 10%; ** indicates significant at the 5% level; *** indicates significant at the 1%