Using panel data from the Vietnam Household Living Standard Survey for 1992/93 and 1997/98, we find econometric evidence to suggest that microcredit contributes positively to household outcomes by helping households in rural Vietnam to get out of poverty and by improving their business skills. It is also found that collateral is a key factor in loan contracts; specifically, land reform plays an important role in rural credit. The interest rate is found to be significant to availability of rural credit in 1997/1998, indicating that banking sector reform increases the efficiency of rural credit market. Overall, we show that the role of credit in household outcomes was higher in 1997/1998 compared with 1992/1993, and find further evidence to suggest that economic reform, banking sector reform and land reform in early 1990s have positively contributed to household outcomes through a more efficient rural credit market