Banking on Transparency for the Poor: Experimental Evidence from India

Do information frictions limit the benefits of financial inclusion drives for the rural poor? We evaluate an experimental intervention among recently banked poor Indian women receiving government cash transfers via direct deposit. Treated women were provided automated voice calls confirming details...

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Bibliographic Details
Published inIDEAS Working Paper Series from RePEc
Main Authors Field, Erica M, Rigol, Natalia, Troyer Moore, Charity M, Pande, Rohini, Schaner, Simone G
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 01.01.2022
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Summary:Do information frictions limit the benefits of financial inclusion drives for the rural poor? We evaluate an experimental intervention among recently banked poor Indian women receiving government cash transfers via direct deposit. Treated women were provided automated voice calls confirming details of transactions posted to their accounts. The intervention increased women's knowledge of account balances and trust in their local banking agent. Indicative of improved consumption-smoothing by income-constrained women, administrative data show that treated women accessed government transfers faster when the service was active, with treatment effects dissipating after the notifications were discontinued. On average, other aspects of account use remained unchanged. However, consistent with account information benefiting those with high transaction costs more, the intervention increased account use among women who lived more than an hour from the kiosk.