In a manner uncomfortably reminiscent of ‘sub-prime’ mortgage lending, foreign capital flows generated by ‘financialisation’ are funding rapid growth of micro-lending. Such investments typically neglect deposits, the financial service of greatest value to the poor. They may also inhibit autonomous financial development at the grassroots level since the availability of foreign funding tends to repress domestic savings and to retard domestic financial intermediation and financial deepening. By contrast, financially-inclusive and locally-embedded institutions in a ‘distributed’ system offer the possibility of sustainable financial development for the poor.