Bank account ownership in India has more than doubled since 2011 and the size of India’s agent banking network has grown to accommodate this broader user base. This rapid expansion, however, has not translated into equal use of services, even in settings where a large number of agents operate within a local market. Building on six years of collaborative research with the government of Bihar, India, we hypothesize that both supply- and demand-side constraints are contributing to an equilibrium with low quality of services and low levels of trust. This, in turn, may be preventing citizens from accessing local agents for banking services. We propose a study that will identify the relevance of these supply- and demand-side forces constraining low-income populations’ use of financial services in rural Bihar. To accomplish this, we will conduct a community-level randomized control trial with three treatment groups, in which village clusters are assigned to receive: (i) citizen awareness drives, aimed to increase vulnerable populations’ ability to assess service quality and hold operators accountable; (ii) FSP operator training and certification to signal operators’ commitments to quality; and (iii) both the aforementioned supply- and demand-side interventions. Our proposed research design will allow us to detect complementarities in supply and demand-side interventions, as well as spillover effects on non-treated operators. In addition to collecting data from FSP operators and households, we will utilize mystery shopping to measure service quality and misconduct absent social desirability concerns. In keeping with our commitment to policy engagement, we will leverage our relationships with policymakers and financial service-linked organizations to share research results and inform policymaker and private sector efforts to enable vulnerable groups to benefit more fully from financial inclusion efforts.
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