Tuesday, July 16, 2019

26 July 2019: Formal finance, poverty and mental health: Experimental evidence from India

Rohini Pande
Yale University and
Giorgia Barboni
Warwick Business School, University of Warwick

We report on a nine-year long-run large-scale randomized controlled trial that evaluates the impact of Kshetriya Grameen Financial Services (KGFS), an Indian financial institution that offers rural poor a suite of financial products -- micro-credit, micro-savings and micro-insurance -- paired with financial advising. In three rural districts of Tamil Nadu, KGFS randomized choice of service area, creating 50 treatment and 50 control areas. Together, this covered 876 villages. This paper provides a set of core results based on household surveys covering a sample of 4,160 households.

Our paper shows that the arrival of a formal financial institution like KGFS in rural Tamil Nadu leads to a significant impact on poverty reduction, with income consistently improving across the entire household distribution in treated service areas. Moreover, the gains deriving from increased formal indebtedness do not come at the cost of additional mental pressure: treated women report improved decision-making as well as subjective well-being, while also showing a significant reduction in their levels of stress.

Date: July 26, 2019
Time: 04:30 P.M.

Conference Hall, Ground Floor
R&T Building
National Institute of Public Finance and Policy,
18/2 Satsang Vihar Marg, Special Institutional Area,
New Delhi-110067(INDIA)

Those who are interested may please confirm your participation at usha.mathur@nipfp.org.in


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