Applying the Probit and Tobit Models in Examining Factors Affecting the Access by Kien Giang Farming Households to Bank Loans

Abstract

Rural credit takes a crucial part in developing a backward small-sized agricultural production into a commercial production. Rural credit itself is also influenced by various factors. The present paper employs the Probit and Tobit models to analyze factors hindering households in Kien Giang Province from accessing bank loans. The findings show that the more assets households possess, the easier they can secure a bank loan. Apparently, banks merely lend the money to households on the basis of their mortgaged assets but not the effectiveness of their production project. Such findings are one of scientific evidences helping researchers, banks, and decision-makers propose an appropriate policy for the sustainable development of Kien Giang Province. It also helps farmers improve their use of bank loans, increase their income and escape poverty, thereby supporting the sustainable development in Kien Giang.http://jabes.ueh.edu.vn/Home/SearchArticle?article_Id=282e260c-6d6b-4237-928e-bd4ceefb0518