Research on World Agricultural Economy

Access and Impact of Trade Credit on the Benefits of Rice Growing Households in the Mekong Delta, Viet Nam

Hon Van Cao

Faculty of Economics ‑ Business Administration, An Giang University, Vietnam National University Ho Chi Minh City (VNU‑HCM), Long Xuyen 90000, Vietnam

Duyen Lan Nguyen

An Giang University, Vietnam National University Ho Chi Minh City (VNU-HCM),

Nhat Bach Ho

Faculty of Economics ‑ Business Administration, An Giang University, Vietnam National University Ho Chi Minh City (VNU‑HCM), Long Xuyen 90000, Vietnam

Thu Yen Thi Duong

Service Management Center, An Giang University, Vietnam National University Ho Chi Minh City (VNU‑HCM), Long Xuyen 90000, Vietnam

Hoa Thi Cao

Faculty of Law and Political Science, An Giang University, Vietam National University Ho Chi Minh City (VNU‑HCM), Long Xuyen 90000, Vietnam

DOI: https://doi.org/10.36956/rwae.v7i1.2509

Received: 22 July 2025; Published: 26 January 2026

Abstract

The study aims to estimate the access to and impact of trade credit on the benefits of rice-growing households in the Mekong Delta, Vietnam, a region where formal financial access remains limited for smallholder farmers. Using primary data collected from 574 rice farming households across four provinces, the study applies the Propensity Score Matching (PSM) method to address selection bias and ensure robust comparison between households with and without access to trade credit. In the first stage, a Probit regression model identifies seven key factors influencing trade credit access. Among them, household income and farming experience negatively affect access, suggesting that wealthier or more experienced farmers may rely less on dealer base credit. In contrast, landholding size, duration of familiarity with input suppliers, geographic distance, social status, and number of suppliers positively influence access, highlighting the importance of trust, reputation, and market connectivity. The second stage of the PSM method, using four matching techniques nearest neighbor, radius, stratification, and kernel demonstrates that access to trade credit improves both yield and profitability. Specifically, households with access achieve rice yields 8.26%–10.61% higher and profits 0.135–0.392 million VND greater per 1,000 m² than non-accessing households. The study proposes policy recommendations to improve credit accessibility for farmers, enhance input supply relationships, and reduce rural financial exclusion, thereby contributing to sustainable agricultural development in the region.

Keywords: Agricultural Supply Dealer; Farmer; Mekong Delta; Trade Credit

References