2005
DOI: 10.1257/0002828054201242
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Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment

Abstract: Lack of access to finance is often cited as a key reason for why poor people remain poor. This paper uses data on the Indian rural branch expansion program to provide empirical evidence on this issue. Between 1977 and 1990, the Indian central bank mandated that a commercial bank can open a branch in a location with one or more bank branches only if it opens four locations with no bank branches. We show that, between 1977 and 1990, this rule caused banks to open relatively more rural branches in Indian states w… Show more

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Cited by 989 publications
(655 citation statements)
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“…The formal savings products are found to increase the productive investment levels and daily expenditures of relatively poor female entrepreneurs in rural Kenya. Their experimental findings support the knowledge in the broader literature on the impacts of financial services on the poor, which is mostly non-experimental, such as Burgess and Pande (2005).…”
Section: B Evidence From Country-specific Studies and Impact Evaluatsupporting
confidence: 77%
“…The formal savings products are found to increase the productive investment levels and daily expenditures of relatively poor female entrepreneurs in rural Kenya. Their experimental findings support the knowledge in the broader literature on the impacts of financial services on the poor, which is mostly non-experimental, such as Burgess and Pande (2005).…”
Section: B Evidence From Country-specific Studies and Impact Evaluatsupporting
confidence: 77%
“…8 Similar relationships are found for Canada (Trovato and Vos 1992). 9 Mayer (2003) finds similar correlations in India using state-wide variation in gender-related development indexes.…”
Section: Introductionmentioning
confidence: 56%
“…Beck et al (2011) document that there is no significant association between greater state ownership of banks and financial access of SMEs across a sample of 38 developing countries. On the other hand, Burgess and Pande (2005) find that a 1% increase in the number of rural banking locations in India reduces rural poverty by 0.34%. that government ownership of banks could have harmful effects on productivity, economic growth, and the development of financial systems.…”
Section: Introductionmentioning
confidence: 95%