• Jessica Wade, Rock Magleby-Lambert
Innovative Rural Finance in India: ICICI Bank's Credit Access Points

Providing rural finance can be a challenge for private banks, due to information asymmetries and the high cost of due diligence, low population density of the target clientele, and contract enforcement difficulties. However, the rural population presents a huge untapped market for banks in most developing countries. A recent rural finance innovation in India, the credit franchise or credit access point (CAP) initiative by ICICI Bank, offers many insights and lessons for other banks, policy makers, and academics exploring rural finance options. This paper describes the CAP model, discusses a randomised impact evaluation which aimed to test the model’s risk incentives, and analyses the experiment’s findings. The paper additionally compares this innovation to models in other countries, and offers suggestions for future bank-academic collaborations.

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