He secured greater financial security and independence for his family and at the same time, created jobs for 10 persons within his community. As a contribution to his community, one of the three branches was dedicated for micro-entrepreneurs in the locality to showcase their products, free of rental. This simple and generous gesture to share resulted in positive spillovers, where some once wayward school-leavers and young adults received the opportunity to become owners of small businesses plying delicate handicraft and innovative accessories. There are many examples such as this, that if done right, can create a virtuous cycle of 3/4  BIS central bankers' speeches  expanded positive spillovers that uplift the community as a whole. Despite what seems to be an increasingly crowded space, microfinance often ends up being relegated to government-sponsored institutions, non-profit enterprises and donor organizations, because it is perceived to be financially unsustainable if a certain scale is not achieved (usually very large) or imposing high interest rates to hedge risks or cover high operational costs. A growing body of experience shows that the reverse is necessary to deliver a lasting positive impact on the lives of the poor. I have alluded earlier that aligning operational strategies with behaviors of micro borrowers can improve loan performance, thus reducing risks to lenders. In insurance, traditional agency-based distribution models are being disrupted to lower the costs of on-boarding and servicing micro policyholders.

This is against the backdrop that Asia experienced an average GDP growth rate of 9.6 percent. This suggests that trickle-down economics has failed to deliver equitable growth. We should expect that if significant segments of the population are systematically excluded from the tools that drive success, there will be economic consequences. Financial access and education are arguably two of the most critical tools that enable individuals to achieve success. Yet, around 50% of the global population live on less than USD2.50 per day, most of them without access to formal financial services. That is almost one in two people who, given the opportunities that come with financial access, could be making much greater contributions to society, and consequently, raising economic potential. We also learnt that, stagnating median wages have discouraged the low and middleincome from saving and investing. Against this backdrop, microfinance has captured the global imagination of policymakers, development institutions, private enterprises and donors alike to promote greater financial inclusion. Yet over the last few decades, since Grameen Bank entered the world’s consciousness, microfinance has had a mixed experience. World views on this subject have also become more polarised. Some consider microfinance to be the panacea (which it is not) to end poverty, others have been highly critical of its abuse to exploit the poor. These characterizations are very diverse but it is useful feedback that we should ponder. These contrasting views illustrate the complexities and challenges associated with the subject. Microfinance, like all public policies, faces the challenge of implementation.