Further, considering the large customer base of microfinance at 6 crore borrowers2, this is perhaps an appropriate occasion to assess the impact of microfinance on the overall macroeconomy and think of ways by which microfinance can make a more meaningful contribution to the economic development. Microfinance has emerged as one of most important tools to foster financial inclusion.
But South Africa’s inflation profile was not too problematic prior to that shock. Looking ahead, and all else being equal, we have a reasonable chance of getting through this current ‘different’ without high interest rates. But life is never straightforward in central banking. Conditions remain highly uncertain, so we cannot be precise about where interest rates are going.