Crowdlending in Asia: Lessons from Its Chequered History

Abstract

Background: Crowdlending is increasingly popular among investors as a means of alternative investment or for raising capital. This platform emerged in Asia in 2009, with China being one of the earliest countries to introduce crowdlending. Since its inception over a decade ago, the industry has grown significantly; yet multiple unresolved issues remain. Method: Using computer-assisted textual analysis and content analysis, our study examined articles from representative online newspapers in Asian countries to understand crowdlending diffusion in Asia, both within China and outside China. Results: Using the issue-attention cycle and the diffusion of innovation (DOI) theory, our analysis of news excerpts relating to crowdlending over a ten-year period (2009-2019) showed that crowdlending diffusion took two different paths. In China, it started with the practical use of crowdlending, with government regulations introduced after numerous problems emerged. In contrast, outside China, the rules were enacted simultaneously with IT artifact and practice. Furthermore, in connecting the DOI theory with an IT-based regulatory system, we demonstrated the usefulness this approach in explaining how DOI can inform IT sensemaking and rulemaking, which can help crowdlending practitioners remove potential impediments from crowdlending practices. Lastly, media coverage on crowdlending practices was found to have offered multiple perspectives, which could have had an impact on public opinion and attitude towards the new technology. Conclusion: Our study’s chief contribution lies in showing how media facilitates crowdlending diffusion. In painting a broad picture of crowdlending in Asia, we show that media can help the public, practitioners, and governments to be aware of the crowdlending platform’s potential risks and to find ways to mitigate them. Knowing about crowdlending diffusion can help authorities in Asian countries consider more effective ways of regulating the industry. Hence, media as a contextual factor could be considered in other innovation research and IT-based regulation frameworks.