Banking for tourism in the digital age: Access to credit and cashless payments for community-based tourism household-owned businesses in Vietnam

Abstract

This paper examines the impact of access to banking services on household-owned community-based tourism businesses in Northwestern Vietnam. Using a unique dataset of 370 households in 33 tourist destinations, a partialing-out lasso instrumental-variable regression was applied to control endogeneity and model uncertainty. In-depth interviews with relevant stakeholders were also conducted to better interpret findings. Results showed that bank credit and cashless payments have increased income for household-owned community-based tourism businesses. In addition, the education of household heads and collateral assets influence access to these banking services. While the level of training, credit information, and agricultural land use certificates were found to be the main drivers of access to credit, ownership of bank accounts was the main determining factor for the adoption of cashless payments. Results imply that policymakers should focus on relaxing access constraints to expanding credit and cashless payments for community-based tourism development in mountainous rural areas.