Crowdfunding and Crowdmicrofinance, an Evolution of Models for Entrepreneurship of the Poor

Abstract

After the boom of microfinance, we witness boom of crowdfunding. Thus, it is interesting to study their interactions. Benefiting both of a rich historic heritage, these two notions, even though non-synonymous, aim at similar goals. Funding of the economy for the latter poverty alleviation and financial eradication for the former—in its welfarist definition—make it quite logical that these two notions meet to serve each other. Indeed, they stand to be a major lever for entrepreneurs, for whom fundraising has always been an issue. Microfinance has become a tool of democratisation of entrepreneurship funding, while crowdfunding potentially opens entrepreneurship funding to masses. Combining both crowdfunding and microfinance can lead to an acceleration of poverty eradication.