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Trusting Financial Institutions: Out of Reach, out of Trust?

Author

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  • Ute Filipiak

    (Schumpeter School of Business and Economics, University of Wuppertal)

Abstract

This paper empirically investigates the relationship between individual trust in financial institutions and individual access to these institutions. Based on a large-scale survey of savings patterns of Indians, we find that individuals reporting that they do not have access to certain financial institutions within a commutable distance of one day are less likely to trust these institutions with their money. Moreover, we find that this relationship holds for different banks and financial institutions offering services in low-income areas and that differences in trust can be explained to some extent by differences in individual access.

Suggested Citation

  • Ute Filipiak, 2013. "Trusting Financial Institutions: Out of Reach, out of Trust?," Schumpeter Discussion Papers sdp13002, Universitätsbibliothek Wuppertal, University Library.
    • Handle: RePEc:bwu:schdps:sdp13002
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    References listed on IDEAS

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    Cited by:

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    2. Beckmann, Elisabeth & Mare, Davide Salvatore, 2017. "Formal and informal household savings: how does trust in financial institutions influence the choice of saving instruments?," MPRA Paper 81141, University Library of Munich, Germany.
    3. Grace Ibe-enwo & Nicholas Igbudu & Zanete Garanti & Temitope Popoola, 2019. "Assessing the Relevance of Green Banking Practice on Bank Loyalty: The Mediating Effect of Green Image and Bank Trust," Sustainability, MDPI, vol. 11(17), pages 1-16, August.

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    More about this item

    Keywords

    Trust; Financial Institutions; Access; India;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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