Bank Presence and Health

86 Pages Posted: 7 Sep 2021 Last revised: 12 Aug 2022

Date Written: September 8, 2021


What role does bank presence play in improving health? To explore this question, I use a policy of the Reserve Bank of India from 2005 that incentivizes banks to set up new branches in underbanked districts, defined as having a population-to-branch ratio larger than the national average. In a regression discontinuity design, I compare households in districts just above and just below the national average. Six years after the policy introduction, households in treatment districts are a third less likely to be affected by an illness in a month. They miss fewer days of work or school due to an illness and have lower medical expenses. Ten years after the policy was introduced, I observe persistently lower morbidity rates, higher vaccination rates, and lower risks associated with pregnancies. I provide evidence that two previously understudied aspects of banking contribute to the effect: households gain access to health insurance and health care providers gain access to credit. In equilibrium, I observe an increase in health care demand and supply.

Keywords: Financial Development, Banks, Health, Insurance, Credit

JEL Classification: G21, O12, O16, I15

Suggested Citation

Cramer, Kim Fe, Bank Presence and Health (September 8, 2021). Available at SSRN: or

Kim Fe Cramer (Contact Author)

LSE Finance Department ( email )

MAR 7.35
Houghton Street
London, London WC2A2AE
United Kingdom


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