Abstract
The Global Findex survey asks unbanked adults why they do not have a bank account, and many cite the physical distance to bank branches as a key barrier. Does bringing a bank closer encourage them to open an account? To address this question, we analyse data from rounds 8 and 9 of the Afrobarometer survey for Ethiopia. To estimate the causal effect of bank proximity on financial inclusion, we employ propensity score matching (PSM), which compares individuals with similar characteristics but differing access to nearby banks. Overall, we find that bank proximity significantly enhances financial inclusion, with individuals living near a bank being more likely to own an account. Additionally, we find that the effect of bank proximity on financial inclusion is heterogeneous by location and gender. Rural residents (regardless of gender) benefit more than urban residents. Gender differences are evident in urban areas, with women more likely than men to own a bank account. However, in rural areas, women and men benefit equally from bank proximity
