Abstract

This paper is aimed at analyzing the cross-sectional data of 47000 observations from the Vietnam Household Living Standard Survey 2018 to determine Vietnam’s financial inclusion’s impact on poverty. The Logistic Regression Model was applied in this research. For this paper, we constructed a composite index for financial inclusion, and for the multidimensional poverty index, the methodology of Alkire-Foster was applied. Key findings were that: (i) financial inclusion had a significant negative impact on poverty in Vietnam; (ii) A lower poverty rate is seen in people with higher education level; (iii) in areas with favorable conditions and economic development, the poverty rate decreases; (iv) people in urban areas have a higher chance of escaping from poverty than in rural areas; and (v) for households that are ethnic minorities, the poverty rate is higher. These results demonstrate that financial inclusion is one of the factors that have the strongest impact on the poverty rate in Vietnam. The article also proposes several practical solutions to further develop financial inclusion in Vietnam and thereby reduce poverty.

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