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Abstract
This study explores the influence of microcredit access on the living standards of rural households in Vietnam's North Central region. It assesses living standards by examining household expenditure patterns, with a particular focus on the proportion of non-food expenses to total household spending. Applying the Propensity Score Matching method to data from the 2020 Vietnam Household Living Standards Survey (VHLSS), the research analyzes how access to microcredit impacts this expenditure ratio. The results reveal that VBSP and Agribank are the primary microcredit providers in these rural areas, accounting for 72.69% of total credit obtained. Additionally, the study highlights how household characteristics—including the age of the household head, family size, gender, marital status, residency status, ethnicity, and dependency ratio—affect the likelihood of obtaining microcredit. Notably, the findings indicate that microcredit access positively influences household living standards, leading to a 2.75% to 3.725% increase in non-food expenditure share among borrowing households. These insights underscore the crucial role of formal credit in enhancing rural living standards in North Central Vietnam.