Crowdfunding as a Financial Inclusion Tool in Developing Countries: Opportunities, Challenges, and Recommendations

Abstract

Abstract Purpose: This paper is to examine the potential of crowdfunding for financial inclusion and alternative finance. Design/methodology/approach: This paper uses the historical data and current trends as a mixed method. Findings: Conceptual platforms, mobile integration and localized strategies. Research limitations/implications: Infrastructure and tech barrier, Regulatory challenges and trust and culture. Originality/value: 98% original by Turnitin check. Crowdfunding has proved to be an effective instrument of financial inclusion, particularly in developing countries, where it is practically impossible for underbanked and unbanked members of the society to access standard banking services. This paper investigates the potential of crowdfunding platforms as a mechanism for financial inclusion and for enabling individuals and small firms to access capital. We examine the role of crowdfunding as a driver of financial inclusion and discuss its significance in promoting entrepreneurship, economic growth and social change. Based on a common review of case studies in different developing contexts, we find the main challenges and opportunities of crowdfunding from a financial inclusion perspective. The authors contribute to the literature by sharing knowledge about how crowdfunding can be an effective financial inclusion tool, and they provide some recommendations for policy makers, platform operators and the stakeholders needed to improve its reach and effectiveness.