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Banking on the poor? Branch placement and nonfarm rural development in Bangladesh

  • Ravallion, Martin
  • Wodon, Quentin

The authors assess whether the placement of bank branches in Bangladesh responds to unexploited potential for nonfarm rural development. They compare the branch location choicesof a large new private nonprofit bank, the famous Grameen Bank, with those of more traditional government banks. They allow for heterogeneity in household characteristics conducive to success in nonfarm activities when measuring the potential gains from switching out of farming. Farmers are both poor and poorly equipped for success at nonfarm enterprises. Even so, seemingly feasible, but unrealized gains from switching are evident. Grameen Bank is attracted to areas where those gains favor the poor. Other banks put more weight on potential gains to nonpoor.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1858.

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Date of creation: 31 Dec 1997
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Handle: RePEc:wbk:wbrwps:1858
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  1. Ayal Kimhi, 1996. "Demographic composition of farm households and its effect on time allocation," Journal of Population Economics, Springer, vol. 9(4), pages 429-439.
  2. Besley, T., 1993. "Savings, Credit and Insurance," Papers 167, Princeton, Woodrow Wilson School - Development Studies.
  3. Kimhi, Ayal, 1996. "Demographic Composition of Farm Households and Its Effect on Time Allocation," Journal of Population Economics, Springer, vol. 9(4), pages 429-39, November.
  4. Khandker, S.R. & Khalily, B. & Khan, Z., 1995. "Grameen Bank: Performance and Sustainability," World Bank - Discussion Papers 306, World Bank.
  5. Hoff, Karla & Stiglitz, Joseph E, 1990. "Imperfect Information and Rural Credit Markets--Puzzles and Policy Perspectives," World Bank Economic Review, World Bank Group, vol. 4(3), pages 235-50, September.
  6. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
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