Learning to trust your banker

Last registered on December 18, 2017

View Trial History

Pre-Trial

Trial Information

General Information

Title

Learning to trust your banker

RCT ID

AEARCTR-0000433

Initial registration date

July 06, 2014

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published

July 06, 2014, 2:15 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated

December 18, 2017, 9:04 AM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country

India

Region

Chhattisgarh

Primary Investigator

Name

Vincent Somville

Affiliation

NHH - Norwegian School of Economics

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Lore Vandewalle

PI Affiliation

Graduate Institute of International and Development Studies

Contact Investigator

Additional Trial Information

Status

On going

Start date

2013-09-01

End date

2018-12-29

Keywords

Finance & Microfinance

Additional Keywords

savings, trust, behavioural, lab

JEL code(s)

G21, D14, D03, C91, C93, O16

Secondary IDs

Abstract

A crucial component in the bank-client relationship is trust. Clients do not deposit their savings with a bank that they do not trust. Many countries are currently in the process of pushing their populations to adopt formal bank accounts instead, or in addition to, more traditional forms of savings. A successful move from the informal financial sector to formal banks undoubtedly requires a high level of trust between the people and the banks. In this study, we investigate whether trust can be fostered by increasing financial interactions between clients and bankers.

We use two interventions in 17 villages of Chhattisgarh where formal banking through the Business Correspondent model was recently introduced. First, we sample two groups of people: (A) villagers who deliberately opened a bank account, and (B) villagers who did not. The group B villagers are offered an account. Next, half the villagers of both group A and group B are randomly assigned to the second intervention: they receive weekly payments on their bank accounts. The other half (= control) receive the same amounts in cash.

After 2-3 months of weekly payments, we measure trust levels and altruism towards bankers, as well as risk attitudes, using trust, dictator and risk games in a lab-in-the-field setting. This allows us to answer our research question, namely whether trust can be fostered by promoting the usage of accounts and the interactions between clients and their banker.

External Link(s)

Registration Citation

Citation

Somville, Vincent and Lore Vandewalle. 2017. "Learning to trust your banker." AEA RCT Registry. December 18. https://doi.org/10.1257/rct.433-7.0

Former Citation

Somville, Vincent and Lore Vandewalle. 2017. "Learning to trust your banker." AEA RCT Registry. December 18. https://www.socialscienceregistry.org/trials/433/history/24128

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

detailed in attached pre-plan

Intervention Start Date

2014-02-24

Intervention End Date

2014-05-31

Primary Outcomes

Primary Outcomes (end points)

detailed in attached pre-plan:
behavior in trust-game, triple dictator game and risk game.
the games are played between a banker and his clients.

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

detailed in attached pre-plan

Experimental Design Details

We select a random sample of people who opened an account (group A) and a random sample of people who did not. The latter (people without an account) is subject to the first intervention: we give them a bank accountn. After this first treatment, we are left with two groups: A – already had an account, B – received a new account.

We interview these people on a weekly basis during 7 to 13 weeks, as to gather detailed information on the evolution of their household composition and the various earnings and expenditures of their household members. Because those surveys are extremely demanding, each participant is offered INR 150 after each interview.

The second treatment in the experiment is a randomization of the way the weekly compensation is paid. Half of the respondents with a BCSA account receive INR 150 directly on their account (treated), while the others receive it in cash (control).

We now have 4 different groups: Ac had an account and is paid cash, Aa had an account and is paid on it, Bc just received an account and is paid cash, Ba just received an account and is paid on it. The comparison of the groups A and B is crucial to evaluate the importance of the initial self-selection. Most existing studies suffer from the caveat that they only observe impacts on the pool of self-selected individuals (corresponding to our group A). Those impacts may not be representative of what a large scale financial inclusion plan (with accounts opened for everyone) would achieve.

A few weeks after the last payment of Phase 1, we play games in the field to measure risk aversion, trust and altruism between the clients and the banker. The games are described in the attached pre-plan.

Randomization Method

computer - stata

Randomization Unit

individual

Was the treatment clustered?

Yes