Financial development is critical for growth, but its micro-determinants are not understood. We test leading theories of low demand for financial services in emerging markets, combining novel survey evidence from Indonesia and India with experiment. We find a strong correlation between financial literacy and behaviour. However, a financial education program has modest effects, increasing demand bank accounts only for those with limited education or financial literacy. In contrast, small subsidies greatly increase demand. A follow-up survey confirms these findings, demonstrating that newly opened accounts remain open and in use 2 years after intervention.