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Cited by 1,480Microfinance and Financial InclusionBanking stability, regulation, efficiencyMonetary Policy and Economic Impact

‘Do rural banks matter? Evidence from the Indian social banking experiment’

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Burgess, Robin, Pande, Rohini·2005·American Economic Review
DOI 10.1257/0002828054201242
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Abstract

Lack of access to finance is often cited as a key reason why poor people remain poor. This paper uses data on the Indian rural branch expansion program to provide empirial 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 in 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 with lower initial financial development. The reverse is true outside this period. We exploit this fact to identify the impact of opening a rural bank on poverty and output. Our estimates suggest that the Indian rural branch expansion program significantly lowered rural poverty, and increased non-agricultural output.

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Cited by

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Authors
Burgess, R., & Pande, R.
Affiliations
  • National Bureau of Economic Research (US)
  • Yale University (US)
ORCID
Pande, Rohini
Venue
American Economic Review
Publisher
American Economic Association
Published
2005-06-01
Volume
95
Issue
3
Pages
780-795
ISSN
0002-8282 (ISSN-L)
DOI
10.1257/0002828054201242
OpenAlex
W2052902050
Cited by
1,480
References
1
Citations by year
2026: 131 · 2025: 108 · 2024: 94 · 2023: 106 · 2022: 99 · 2021: 114 · 2020: 102 · 2019: 89 · 2018: 88 · 2017: 76 · 2016: 52 · 2015: 55 · 2014: 64 · 2013: 65 · 2012: 51
FWCI
55.79
Type
journal article
Language
en
Open access
Locations
  • American Economic Review (publishedVersion)
  • London School of Economics and Political Science Research Online (London School of Economics and Political Science) (acceptedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
  • London School of Economics and Political Science Theses Online (London School of Economics and Political Science) (submittedVersion)
  • OpenGrey (Institut de l'Information Scientifique et Technique) (submittedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Microfinance and Financial Inclusion
  • Social Sciences › Economics, Econometrics and Finance › Finance › Banking stability, regulation, efficiency
  • Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Monetary Policy and Economic Impact
Keywords
rural banking, access to finance, poverty reduction, financial development, social banking, rural poverty

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