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.
