Pande, Rohini, Robin Burgess, and Grace Wong. 2005. “Banking For The Poor: Evidence From India”. Journal Of European Economic Association 3 (3-2): 268-278.
State led credit and savings programs have been implemented in numerous low income countries, but their success in reaching the poor remains widely debated. We report on research which exploits the policy features of the Indian social banking program to provide evidence on this issue. State-led branch expansion into rural unbanked locations reduced poverty across Indian states. In addition, the enforcement of directed bank lending requirements was associated with increased bank borrowing among the poor, in particular low caste and tribal groups.