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

Jann Goedecke, Isabelle Guérin, Bert D 'Espallier and Govindan Venkatasubramanian ()
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Jann Goedecke: Kristianstad University - Kristianstad University, KU Leuven - Catholic University of Leuven = Katholieke Universiteit Leuven
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

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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.

Keywords: economic anthropology; financial inclusion; informal saving; India; political economy; banks; microfinance (search for similar items in EconPapers)
Date: 2018
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Published in Development Policy Review, 2018, 36, pp.O201-O219. ⟨10.1111/dpr.12272⟩

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DOI: 10.1111/dpr.12272

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