This paper investigates the differential impact of access to formal microcredit on household livelihood indicators for a case study in the MD in Vietnam. The paper compares two different modes of household access to formal credit (individual loans and group-based lending) and the effects of each system on indicators of household livelihood such as total income and expenditure (short term outcome indicators) and households’ total assets, educational costs, healthcare costs, and  food consumption (long term effects). For these indicators a comparison is made between borrowers (individual and group based) and non-borrowers in a sample of 325 households using propensity score matching methods. The findings confirm the impact of microcredit on household welfare for borrowers, both group-based and individual, and on long term livelihood aspects (expenditure levels on education and health care). Income and expenditure levels were significantly higher for group-based borrowers than for non-borrowers. Group-based borrowers are generally much less land-endowed and have a lower income than individual borrowers. This is due to the targeting of the formal credit institution, but interestingly, it also has an influence on the impact of the microcredit.