Thesis Public Defense | VNP27 - Nguyễn Sơn Hà

Determinants of financial inclusion – The Vietnamese households’ perspective

Student: Nguyễn Sơn Hà, VNP-27

Supervisor: Dr. Arjun Bedi & Assoc.Prof.Dr. Vo Hong Duc

Abstract:

Using the Vietnam Household Living Standard Survey (VHLSS) datasets in 2014, 2016, and 2018, this study examines financial inclusion’s key determinants from the perspective of Vietnamese households. This study investigates the effects of the determinants on each level of financial inclusion utilizing an ordered logit model. The empirical results reveal that total income per household, relative income index, and the distance of the household from the nearest financial hub are crucial factors that drive the financial inclusion level. While the total income per household plays a positive role in enhancing financial inclusion, relative income seems to have an adverse effect on the degree of financial inclusion of individuals. Besides, distance to the nearest public bank branch is also a challenge to overcome in achieving the financial inclusion goals in Vietnam in the future. Relevance to Development Studies The World Bank (2012) considers that financial inclusion stands as one of the crucial mechanisms to promote economic growth, reduce poverty, and overcome income inequality. By investigating the determinants of financial inclusion using micro-data in the Vietnamese context, this research contributes to the existing literature by providing a new perspective on Vietnamese households’ characteristics. The findings of this research can also be helpful for
scholars and policymakers regarding the new angles on the main factors that drive financial inclusion in the developing country. Policy implications have emerged based on the findings to attain the goals of financial inclusion.

Keywords: Financial inclusion, Income inequality, Relative income, Household characteristics, Vietnam.
JEL classification: O12, O15, D14, D15.