Using household surveys and bank penetration data at the district-level in 2006 and 2009, this paper examines the impact of Equity Bank-a leading private commercial bank focusing on microfinance-on access to banking in Kenya. Unlike other commercial banks in Kenya, Equity Bank pursues distinct...

We explore the relationship between bank branch expansion, financial inclusion and profitability for Equity Bank. Unlike traditional banks in Kenya, Equity Bank pursues branching strategies that target underserved territories and less privileged households. Its presence has a positive and...

Most analyses of banking crises assume that banks use real contracts. However, in practice, contracts are nominal and this is what is assumed here. We consider a standard banking model with aggregate return risk, aggregate liquidity risk and idiosyncratic liquidity shocks. We show that, with...

In a model with bankruptcy costs and segmented deposit and equity markets, we endogenize the cost of equity and deposit finance for banks. Despite risk neutrality, equity capital earns a higher expected return than direct investment in risky assets. Banks hold positive capital to reduce...