Miriam Bruhn is in the Development Economics Research Group (DECRG) at the World Bank. Inessa Love is at the University of Hawaii at Manoa and in DECRG at the World Bank. We thank the Knowledge for Change Program for supporting this project with funding and Kiyomi Cadena for providing excellent research assistance. We are also grateful to David McKenzie and to James Vickery for their very useful comments. The views expressed in this paper do not necessarily represent those of the World Bank, its Executive Directors, or the countries they represent.
The Real Impact of Improved Access to Finance: Evidence from Mexico
Article first published online: 8 MAY 2014
© 2014 the American Finance Association
The Journal of Finance
Volume 69, Issue 3, pages 1347–1376, June 2014
How to Cite
BRUHN, M. and LOVE, I. (2014), The Real Impact of Improved Access to Finance: Evidence from Mexico. The Journal of Finance, 69: 1347–1376. doi: 10.1111/jofi.12091
- Issue published online: 8 MAY 2014
- Article first published online: 8 MAY 2014
- Accepted manuscript online: 12 AUG 2013 07:20AM EST
- Manuscript Accepted: 3 JUN 2013
- Manuscript Received: 8 SEP 2011
This paper provides new evidence on the impact of access to finance on poverty. It highlights an important channel through which access affects poverty—the labor market. The paper exploits the opening of Banco Azteca in Mexico, a unique “natural experiment” in which over 800 bank branches opened almost simultaneously in preexisting Elektra stores. Importantly, the bank has focused on previously underserved low-income clients. Our key finding is a sizeable effect of access to finance on labor market activity and income levels, especially among low-income individuals and those located in areas with lower preexisting bank penetration.