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  • Harmonizing the interests of lenders and borrowers with the goals of sustainable territorial development: The basis for product development in retail banking (A survey of the literature)

Harmonizing the interests of lenders and borrowers with the goals of sustainable territorial development: The basis for product development in retail banking (A survey of the literature)

TERRA ECONOMICUS, , Vol. 12 (no. 2),
p. 88-108

Recent research on inclusive financial services reveals the urgency of issues related to product development in retail banking, and especially for low-income groups. The article provides a review of literature on microfinance, relationship banking, social banking, community banking, and group lending in context of achieving financial sustainability by both borrowers and lenders having their interests harmonized with those of sustainable territorial development. The theoretical gap is identified, showing the lack of researchers’ attention to retail product/service development aimed at harmonization of interests of consumer lending system participants. Increasingly important role of local communities in sustainable (= rational) lending is proved. The conclusion is made that the product development in retail banking, being community-oriented, should be aimed at the alignment of interests of the borrowers and the lenders, along with sustainable territorial development priorities.

Keywords: product development in retail banking; literature review; sustainable banking; microcredit; financial inclusion; group lending; individual lending; relationship banking; sustainable community development; credit behavior

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Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606