Access to banking, savings and consumption smoothing in rural India

Arbeitspapier

Access to formal banking is increasing across the world and may transform how people manage their finances. We report from a field experiment that randomly provides access to a bank account to a representative sample of villagers in rural India. The treated respondents save actively into the account and their individual savings increase. There is, however, no signi cant impact on mean household savings nor on average expenditures, income, loans or transfers. Based on weekly data from financial diaries, we show the control households partially smooth consumption through transfers received from others. The treated households smooth consumption (and nutrition) better than the control households, thanks to pro-cyclical saving on the account. The latter result provides an important new insight into the role of banking in low and middle-income countries.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Graduate Institute of International and Development Studies Working Paper ; No. HEIDWP09-2019

Classification and Topics

• Classification: Wirtschaft ; Field Experiments ; Household Saving; Personal Finance ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance ; Microeconomic Analyses of Economic Development

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Somville, Vincent ; Vandewalle, Lore
• Event: Veröffentlichung
• (who): Graduate Institute of International and Development Studies
• (where): Geneva
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/201705
• Last update: 10.03.2025, 11:46 AM CET