Relationship between crowdfunding and microfinance: A theoretical approach

Abstract

Crowdfunding is becoming an important tool to get funds for many projects thanks to web platforms that links funders and backers. Backers can get back from funders some return like equity capital, rewards, interest rates or nothing (donation). Recently, these Crowdfunding tools have been use by Microfinancial institutions to help people living in underdeveloped countries to improve their quality of life. Specially, these institutions have been using Donation Crowdfunding and Crowdlending tools. Moreover, we can establish that when Crowdfunding tools are dedicated to social integration, differences with Microfinance institution way to operate are not clear. In this paper, we try to set factors appearing in the academic literature relating both concepts. Results will help to find points of collaboration between them to get their owns objectives.

Keywords

• crowdfunding
• microfinance
• fintech
• crowdlending
• entrepreneurship