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Why do financial inclusion policies fail in mobilizing savings from the poor ? Lessons from rural South India

Author

Listed:
  • Jann Goedecke

    (Kristianstad University - Kristianstad University, KU Leuven - Catholic University of Leuven = Katholieke Universiteit Leuven)

  • Isabelle Guérin

    (CESSMA UMRD 245 - Centre d'études en sciences sociales sur les mondes africains, américains et asiatiques - IRD - Institut de Recherche pour le Développement - Inalco - Institut National des Langues et Civilisations Orientales - UPD7 - Université Paris Diderot - Paris 7, IFP - Institut Français de Pondichéry - MEAE - Ministère de l'Europe et des Affaires étrangères - CNRS - Centre National de la Recherche Scientifique)

  • Bert D 'Espallier

    (KU Leuven - Catholic University of Leuven = Katholieke Universiteit Leuven)

  • Govindan Venkatasubramanian

    (IFP - Institut Français de Pondichéry - MEAE - Ministère de l'Europe et des Affaires étrangères - CNRS - Centre National de la Recherche Scientifique)

Abstract

Combining multivariate and qualitative analyses, this micro-level study suggests anexplanation for the persistence of informal savings in rural South India despite publicly runlarge-scale programs to promote bank savings. Notably gold, but also ROSCAs and privatelending, remain dominant forms of saving. We argue that cultural norms and social institutionssuch as social class and caste shape the nature, the propensity but also the opportunities to save.Gold serves multiple purposes, which are financial, economical, socio-cultural, and political.Furthermore, we find that Dalits' (the lowest caste) preference for gold illustrates a relativeemancipation of Dalits combined with the maintenance of prohibition related to caste whichprevents them to invest in other assets such as land.

Suggested Citation

  • Jann Goedecke & Isabelle Guérin & Bert D 'Espallier & Govindan Venkatasubramanian, 2018. "Why do financial inclusion policies fail in mobilizing savings from the poor ? Lessons from rural South India," Post-Print ird-01413177, HAL.
    • Handle: RePEc:hal:journl:ird-01413177
    DOI: 10.1111/dpr.12272
    Note: View the original document on HAL open archive server: https://ird.hal.science/ird-01413177
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    Citations

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    Cited by:

    1. Fouillet, Cyril & Guérin, Isabelle & Servet, Jean-Michel, 2021. "Demonetization and digitalization: The Indian government's hidden agenda," Telecommunications Policy, Elsevier, vol. 45(2).
    2. P.V. Viswanath, 2021. "Connectivity and Savings Propensity among Odisha Tribals," Sustainability, MDPI, vol. 13(2), pages 1-15, January.
    3. Tanmoyee Banerjee-Chatterjee & Malabika Roy & Ajitava Raychaudhuri, 2021. "Financial Inclusiveness and Mobilization of Household Savings in Rural Area: Are They Related?," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 19(2), pages 223-249, June.
    4. Raghbendra Jha & Woojin Kang & Hari K. Nagarajan & Anirudh Taga, 2019. "Workfare and Vulnerability in Rural India," ASARC Working Papers 2019-01, The Australian National University, Australia South Asia Research Centre.
    5. Steinert, Janina Isabel & Vasumati Satish, Rucha & Stips, Felix & Vollmer, Sebastian, 2022. "Commitment or concealment? Impacts and use of a portable saving device: Evidence from a field experiment in urban India," Journal of Economic Behavior & Organization, Elsevier, vol. 193(C), pages 367-398.
    6. Ozili, Peterson K, 2023. "Impact of monetary policy on financial inclusion in emerging markets," MPRA Paper 117804, University Library of Munich, Germany.
    7. Yugank Goyal & Klaus Heine, 2021. "Why do informal markets remain informal: the role of tacit knowledge in an Indian footwear cluster," Journal of Evolutionary Economics, Springer, vol. 31(2), pages 639-659, April.
    8. Huang, Ruixian & Kale, Seenaiah & Paramati, Sudharshan Reddy & Taghizadeh-Hesary, Farhad, 2021. "The nexus between financial inclusion and economic development: Comparison of old and new EU member countries," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 1-15.
    9. Isabelle Guérin & Youna Lanos & Sébastien Michiels & Christophe Jalil Nordman & Govindan Venkatasubramanian, 2017. "Demonetisation, Social Networks and Social Protection: Insights from Rural Tamil Nadu," Working Papers DT/2017/10, DIAL (Développement, Institutions et Mondialisation).
    10. Manisha Chakrabarty & Subhankar Mukherjee, 2022. "Financial Inclusion and Household Welfare: An Entropy-Based Consumption Diversification Approach," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(3), pages 1486-1521, June.
    11. Julie Birkenmaier & Qiang Fu, 2018. "Household Financial Access and Use of Alternative Financial Services in the U.S.: Two Sides of the Same Coin?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 139(3), pages 1169-1185, October.

    More about this item

    Keywords

    economic anthropology; financial inclusion; informal saving; India; political economy; banks; microfinance;
    All these keywords.

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