Financial exclusion in developed countries: a field experiment among migrants and low-income people in ItalyJournal articleGiorgia Barboni, Alessandra Cassar et Timothee Demont, Journal of Behavioral Economics for Policy, Volume 1, Issue 2, pp. 39-49, 2017

We designed an experiment to estimate the socio-economic and behavioral characteristics associated with financial exclusion in a developed economy and the demand for savings products progressively trading-off flexibility for commitment. Our sample includes people in Italy living below the poverty line, stratified by migration status. Despite a large bank branch penetration in the study area, we find a high rate of financial exclusion, with households below the sample median income being unbanked at twice the rate of those above (30% vs. 15%), a difference that is especially significant for migrants. Financial exclusion is associated with poverty and social exclusion, as measured by unemployment, low food consumption, and little help from personal networks. Despite a high-declared willingness to open new accounts and a strong interest in commitment products following a financial education training seminar, actual uptake in the year to follow remains low, suggesting that demand-driven factors besides knowledge hamper access to formal financial services, namely incomes that are perceived too low to make accounts worthwhile. Yet, migrants, especially if non-Muslim, appear more willing to become financially included than non-migrants, suggesting that there are gains to be made by targeting minorities.

Microfinance spillovers: A model of competition in informal credit markets with an application to Indian villagesJournal articleTimothee Demont, European Economic Review, Volume 89, Issue C, pp. 21-41, 2016

Despite widespread interest in the development of microfinance, spillover effects on the non-using population and redistributive issues remain largely unexplored. I study a competition game between microfinance institutions (MFIs) offering joint-liability loans and moneylenders offering individual loans in presence of adverse selection. I show that one unintended consequence of the entry of a microfinance sector in local credit markets can be to trigger an increase in the equilibrium informal interest rate, because MFIs tend to attract a disproportionately-safe share of the borrower pool away from incumbent moneylenders. The existence of such composition externality depends crucially on the size of the microfinance sector and the risk composition of the borrower pool. The model predicts a non-linearly increasing relationship between informal interest rates and MFIs' capacity in relatively safe credit markets, and no relationship in risky villages. I show evidence supporting these predictions, using a first-hand panel database that records all credit transactions over 8 years for a sample of about 1000 households living in Indian villages with extensive space and time variation in the size of their microfinance sector.

Investing in Boys and Girls: Schooling Decisions and Credit Constraints for Microfinance Participants in IndiaJournal articleJean-Marie Baland, Timothee Demont, Rohini Somanathan et Michel Tenikue, PRADAN NewsReach, Volume 13, Issue 1, pp. 16-27, 2013


The demand for savings, credit and insurance in a simple dynamic frameworkJournal articleTimothee Demont et Vianney Dequiedt, FERDI - Policy brief, Issue 81, 2013

We present in this note a simple theoretical model, suitable to study the simultaneous demand for savings, credit and insurance by poor agricultural households. Simulations are reported for various prices of the three different financial instruments. They highlight a very low demand for insurance and suggest a complementarity between credit and insurance.

Poverty, Access to Credit and Absorption of Income Shocks: Evidence from Self-Help Groups in IndiaJournal articleTimothee Demont, PRADAN NewsReach, Volume 12, Issue 10, pp. 38-48, 2012


Lucha contra las restricciones a la innovación agrícola: un enfoque de mercadoBook chapterTimothee Demont, C. de la Torre (Eds.), 2008, Volume 2, ITDG, 2008