What Challenges Do Microfinance and Crowdfunding Face?

Microfinance and donation-based crowdfunding have transformative potential in the developing world. The latter is currently growing at a rate of well over 100% annually in all but a small part of the world, can generate hundreds of millions in donations quickly in the aftermath of a natural disaster, and is seen as “an innovation in entrepreneurial finance that can fuel ‘the Rise of the Rest’ globally,” a World Bank report says.

We’re following these developing market issues on our Market Integrity Insights blog, as well as our European Investment Conference (EIC) blog. They are also issues we’re bringing to our members, live, at events like the most recent EIC in London, where Josina Kamerling, head of regulatory outreach at CFA Institute for EMEA, moderated a talk with Lars Kroijer, founder and managing director of AlliedCrowds, on “Crowdfunding: An Alternative Funding Source for Developing Markets?”

Crowdfunding: ‘How I Got Hooked,’ Hurdles, and Blockchain

While at the conference, Kamerling also did a video interview with Kroijer. Introducing him, she draws parallels between what Idowu Koyenikan, author of Wealth for All Africans, says: “When money realizes that it is in good hands, it wants to stay and multiply in those hands,” and what Kroijer does.

Watch the video to see Kroijer share what he feels are chief among the challenges to crowdfunding (regulation, fraud prevention, and transitioning from a predominantly donation-based model to more for-profit investments), why they are challenges, how he “got hooked” on alternative finance, and why he’s so keen on blockchain technology.

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