on products and pricing, manage risk, innovate, adapt, change and grow. ( viii ) role of small, locally - oriented financial service providers : the importance of small organizations should not be minimized ; they are often the most significant, if not the only, financial service providers in many communities. small financial service providers can be expected to penetrate their markets, seeking alliances with others and through networks to offer a greater range of products and services. 15. though financial sustainability is essential for massive and swift expansion of services, to maximize client - level benefits it is essential to ensure social sustainability of financial inclusion programs. while intertwined with financial sustainability, social sustainability demands that : ( i ) effective community and social mobilization is critical to success of financial inclusion strategy. it involves using participatory process to raise awareness, mobilize and involve local leadership, institutions and communities to organize for collective action for common goals and objectives to reach poor, women and the disadvantaged. community investment fund ( cif ) provides a useful tool to reach the poorest decile of population. the experience of successful cifs demonstrate that savings - based and self help groups ( shg ) based cifs are some of the most successful models for achieving better social outcomes on sustainable basis. externally funded cifs have lower odds of success as they have to swim against the stream of natural incentives of group members. it is prudent for external funders to provide support services to cif instead of injecting loan capital. ( ii ) targeted support programs. most pertinent in this context would be the community and rural support programs which catalyze employment opportunities. whether they are by way of subsidized lending program mfis ( or those who support them ) should be able to report on how ( or whether ) the stated goals they have promised ( i. e., improved earnings, reduced vulnerability, increased empowerment, etc. ) are being realized. ( iii ) properly structured credit enhancements : design credit enhancement in a way that mfis use of the facility is subject to fulfilling social sustainability criteria to yield better social outcomes. ( iv ) social performance demands keeping a close watch on the financial bottom line through better retention of clients and reduction of costs, quality of services, improvements in client lives through proper economic empowerment which could be through business opportunities, education, health, or agricultural extension, with additional appropriate funding. 16. in a nutshell, evidence suggests that poverty reduction strategies are successful

question of “ access. ” direct intervention to build financially inclusive system is critical as one recognizes fully ( i ) financial markets failures and imperfections such as information asymmetries, lack of sensitivity to gender and redistributive dimensions of resources and wealth and high transaction costs etc. ; ( ii ) high price and non - price barriers such as lack of credit history and collateral and connection ; and ( iii ) other constraints such as lack of literacy and entrepreneurial skills, etc. 4. over the years, there has been substantive development in the architecture and thinking on financial inclusion. while there is no “ one - size fits all ” financial inclusion strategy or approach but it is important to recognize few core or necessary and sufficient conditions that are needed to maximize the benefits derived from such strategy. 5. at the outset, it is critical to understand the size and dimension of financial exclusion. despite complexities of estimation, a recent study 3 concluded that average level of financial an alternative definition of poverty ( $ 2 a day ) gives an estimate of 2 billion poor in asia. however, for monitoring progress of mdgs, world bank uses the $ 1 / day definition as it reflects extreme poverty. the world bank, global monitoring report, 2007. beck, thorsten, asli demirgc - kunt, and maria soledad martinez peria ( 2007 ) " reaching out : access to and use of banking services across countries. " journal of financial economics 85 ( 1 ). exclusion, as measured by the percentage of the adult population with access to an account with a financial intermediary, in poor developing countries is as high as the level of financial inclusion in advanced industrialized countries where it is rare not to have at least some access to basic financial services in remote parts. in developing countries, level of financial exclusion is steepest in sub - saharan africa ( a reflection of extreme poverty and difficult economic condition ). situation in asia, present a mixed picture. south asia ( average access rate being 31 percent ) lags behind in expanding financial access relative to south east asia ( average access rate being 47 percent ). advanced transition economies of central europe have progressed well in rebuilding access. there has been relatively little progress made in central and south america despite a relatively robust economic base, particularly among larger countries. 6. to design strategy and policies, there is further need to understand what the reasons for exclusion are? is it voluntary or pure denial of services and what the barriers of access to finance are