Financial inclusion in Vietnam: the impacts of demographic factors on the use of financial services

The research paper aims to understand the determinants of financial inclusion in Vietnam from the demand side. The empirical results are based on the World Bank’s 2017 Global Findex Database. Applying probit and multivariate probit estimations, it will analyse the correlation between individual characteristics (age, gender, income, education and employment status) and the use of formal financial services in Vietnam. Financial inclusion in this paper is defined as the probability of having a formal account / formal saving / formal credit. Sub-sample estimation for the year 2014 is also employed for robustness purpose. The main findings are that wealth and education have a positive and statistically significant relation with the level of financial inclusion in most of cases. While age and occupation are less likely to affect a person’s participation in financial system, gender shows no effect on the probability of having a formal account / formal saving / formal credit. The implication of these findings for policy is that the government should take the socio-economic characteristics into consideration to address the un-favoured groups of population when establishing the financial inclusion policies.