Halim, Md. Abdul
A icle
Does c owd unding con ibu e o digi al inancial
inclusion?
Resea ch in Globaliza ion
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Sugges ed Ci a ion: Halim, Md. Abdul (2024) : Does c owd unding con ibu e o digi al inancial
inclusion?, Resea ch in Globaliza ion, ISSN 2590-051X, Else ie , Ams e dam, Vol. 9, pp. 1-13,
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Does c owd unding con ibu e o digi al inancial inclusion?
Md. Abdul Halim
Depa men o Accoun ing, Mawlana Bhashani Science and Technology Uni e si y, San osh, Tangail 1902, Bangladesh
ARTICLE INFO
Keywo ds:
C owd-Funding Models
Digi al Financial Inclusion
C owd-Funding Implica ion
ABSTRACT
This s udy ex ensi ely examines c owd unding o p omo e and enhance digi al inancial inclusion. The goal o
his esea ch is o in es iga e he ole o c owd unding in digi al inancial inclusion and o es ablish a s an-
da dized measu e o compa ing he le el o inancial inclusion ac oss a ious economies wo ldwide. Th ough a
comp ehensi e analysis o ele an schola ly li e a u e and empi ical da a, his esea ch s udy p esen s an in-
dep h in es iga ion. The s udy shows ha c owd unding can con ibu e o inancial inclusion h ough a ious
models, including Rewa d-based C owdFunding, Communi y-based C owdFunding, Seg ega ed Clien Model,
No a y Model, Gua an eed Re u n Model, C owd- unding Asse Secu i ized Model, Dona ion-based C owd-
Funding, Equi y-based C owdFunding, and Deb -based C owdFunding. This s udy also shows ha Singapo e
main ains i s op posi ion as he mos inancially inclusi e ma ke . Singapo e is posi ioned a he op ega ding
he pilla s o go e nmen assis ance, employe suppo , and inancial sys em suppo , anking i s , second, and
hi d, espec i ely. This s udy will p o ide aluable insigh s o o ganiza ions seeking o es ablish hei own
c owd unding pla o ms, as well as indi iduals in e es ed in showcasing hei businesses on such pla o ms.
1. In oduc ion
The issue o inancial inclusion has been a signi ican ocal poin
since he global inancial c isis o 2008, wi h a pa icula emphasis on
he socie al unc ions o inancial se ices. P omo ing inancial inclusion
has become an impo an ocal poin wi hin he in e na ional economic
e o m agenda (Kim & De Moo , 2017). Digi al inancial se ices,
mic o inance, Islamic inance, inancial educa ion, and go e nmen
in e en ion ha e inc eased, p omo ing inancial inclusion. Fo
example, digi al inancial se ices, including mobile banking and elec-
onic inancial ansac ions, a e conside ed signi ican ways o educe
ansac ion cos s and geog aphical ba ie s (Asongu and Nwachukwu,
2017. C owd unding is a inancial echnology pla o m ha acili a es
he unding o a p ojec o business by solici ing mone a y con ibu ions
om a wide g oup o indi iduals. This include he p ojec unde , in-
di iduals who con ibu e h ough c owd unding, and dono s (P ana-
ning yas & I awa i, 2021).
C owd und aising has become a no el inancial op ion du ing he
wo ldwide economic c isis. The ad en o inno a i e c owd unding
echnology (ICT), pa icula ly he in e ne , has acili a ed he expansion
o his unique o m o inancing. I has been ex ensi ely u ilized by s a -
ups and small and medium en e p ises wo ldwide as a me hod o
ob aining unds. Raising unds h ough online pla o ms ia c owd
und aising has become mo e con enien and cos -e ec i e (Kapoo &
Sha ma, 2022). Digi al inancial inclusion (DFI) e e s o p o iding
inancial echnology (FinTech) se ices o he popula ion who lacks
access o hem. FinTech e e s o he digi al ins umen s ha a e in lu-
encing and s eng hening he inancial indus y, ul ima ely con ibu ing
o a mo e obus inancial and economic sys em (Anakpo, Xha e, &
Mishi, 2023; P ananing yas & I awa i, 2021).
Acco ding o Napie , Melamed, Taylo , and Jaeggi (2013), he no ion
o inancial exclusion encompasses no jus indi iduals bu also ex ends
o o ganiza ions. Acco ding o hei indings, a signi ican p opo ion o
small and medium-sized i ms (SMEs) owned by women in eme ging
economies, p ecisely 70 %, ace limi ed access o inancial se ices o
ecei e inadequa e suppo om inancial ins i u ions. This si ua ion
a ises mainly owing o s ingen colla e al p e equisi es, sho e loan
du a ions, and compa a i ely highe in e es a es imposed on women
en ep eneu s han hei male coun e pa s. In addi ion, ag icul u al
en e p ises encoun e inancial limi a ions, pa icula ly in de eloping
na ions, due o he lack o es ablished inancial mechanisms.
The Uni ed Na ions (UN) de ines a de eloping coun y wi h a mod-
e a e o low Human De elopmen Index (HDI), an unde eloped indus-
ial base, and a ela i ely poo li ing. This index compa es po e y,
illi e acy, educa ion, li e expec ancy, and o he aspec s
1
(Ranis, S ewa ,
& Samman, 2006). The c owd- unding pla o m is a new online
E-mail add ess: [email p o ec ed].
1
h ps://www.educa ionalpa hwaysin e na ional.o g/wha -is-a-de eloping-coun y/ (09 July 2023).
Con en s lis s a ailable a ScienceDi ec
Resea ch in Globaliza ion
jou nal homepage: www.sciencedi ec .com/jou nal/ esea ch-in-globaliza ion
h ps://doi.o g/10.1016/j. esglo.2024.100238
Recei ed 18 No embe 2023; Recei ed in e ised o m 4 July 2024; Accep ed 8 July 2024
Resea ch in Globaliza ion 9 (2024) 100238
2
und aising p ocess ha usually inances a new o ganiza ion by
including many people. A small s a up, small o ganiza ion, o an
essen ial o ganiza ion like a bank can inance by aising a small amoun
o money om many people using social media. I is an ins i u ional
e o o nume ous non-p o icien indi iduals who a e inse ed in us o
back an endea o on he web. This new ype o inancial inno a ion
a ose a e he 2008 inancial mel down in ligh o he expanded chal-
lenges he independen company i ms aced in ge ing asse s om he
con en ional inancial amewo k. C owdFunding appea ed in 2011 o
he i s ime. China has had success using C owdFunding pla o ms. End
o July 2018, he numbe o C owdFunding o ganiza ions was 251 (PIK,
2019). The majo i y o C owdFunding o ganiza ion is success ul cases,
a ound 82.3 % (PIK, 2019).
The appea ance o C owdFunding sys ems looks o supply a new and
a ailable und aising app oach o s a up companies and Small and
Medium En e p ises (SMEs). Mos Small and Medium En e p ises play a
ole in inc easing he economic de elopmen o coun ies. Howe e ,
hese en e p ises ha e aced a inancial p oblem ecen ly due o COVID-
19. Hence, C owdFunding p o ides an e o less way o Small, Medium,
and En e p ises o aise capi al o be e imp o emen and expansion.
The C owdFunding app oach may be an e ec i e and e icien way o
imp o e he o e all economy o de eloping coun ies. The impo ance
o C owdFunding is essen ial igh now om a global pe spec i e. The
necessi y o C owdFunding will be needed in de eloping coun ies in he
u u e. So, we should unde s and i s ac i i y and isk om in es ing ha
elemen s will in luence suppo e s’ in es men choice on C owdFunding
pla o ms (Abdeldayem & Aldulaimi, 2022; D esne , 2014; Fenwick,
McCahe y, & Ve meulen, 2018; Hend a mi, Sukmaning um, Hadi, &
Ra nasa i, 2019).
Al hough i is belie ed ha c owd- unding p esen s excellen op-
po uni ies o imp o ing access o inance and suppo ing en ep e-
neu ship, inno a ion, and de elopmen in de eloping coun ies, i is
essen ial o conside some challenges ha may hinde he adop ion and
g ow h on he con inen . I is o u mos signi icance when one conside s
ha he p ima y ehicles o expanding he c owd- unding sec o ,
namely c owd- unding pla o ms, a e mos ly business endea o s in and
o hemsel es. While business owne s mus ace p oblems ega dless o
he en i onmen in which hey ope a e, speci ic di icul ies con inue o
be p e alen in de eloping en i onmen s (Alon & Shneo , 2017; Singh &
Belwal, 2008).
C owd unding is amassing inancial esou ces om a subs an ial
g oup o indi iduals h ough modes indi idual con ibu ions acili a ed
by he In e ne o suppo a speci ic pe son o o ganiza ional endea o s
o en e p ises. C owd unding has he po en ial o educe he apid and
cos -e ec i e acquisi ion o capi al o indi iduals o businesses who
ha e been excluded om adi ional inancial se ices. This in es iga-
ion makes a aluable con ibu ion o he g owing body o academic
li e a u e on inclusi e de elopmen by examining he ole o c owd-
unding in p omo ing inancial inclusion. The inqui y’s posi ioning is
d i en by he policy impo ance o o ganizing exis ing knowledge
ega ding he connec ion be ween c owd unding and inancial inclusion
(O danini, Miceli, Pizze i, & Pa asu aman, 2011; Yeyouomo, Asongu, &
Agyemang-Min ah, 2023).
The eme gence o c owd unding is essen ial o o e coming he
p oblem o adi ional business inancing. I is used as he opposi e o he
mains eam app oach o business inance. When you wan o s a a new
business o inc ease you capi al, you mus iden i y you business plan,
ma ke esea ch, and business p o o ypes. Then, you ha e o aise unds
om a limi ed sou ce o implemen you planning, namely he bank, he
angel in es o , and he en u e capi al i m, which limi s you op ions o
a ew key playe s. You can hink o he adi ional app oach as jus a
unnel because you will lose money and ime i you ail o iden i y his
unnel in he igh in es o o i m.
On he o he hand, c owd unding pla o ms will esis you om ha
unnel. So, c owd unding pushes digi al inancial inclusion o accele a e
economic ac i i ies. This s udy has p o ided C owd Funding models and
policy implica ions ha will help all s akeholde s. Conside ing he
s a egies men ioned ea lie , he objec i e o acili a ing inancial se -
ice accessibili y o economically ulne able and disad an aged pop-
ula ions, as well as hei aim o mi iga e ansac ion expenses,
c owd unding may se e as a iable a enue o enhancing inancial in-
clusion (Jenik, Lyman, & Na a, 2017; Paza basioglu e al., 2020).
In con empo a y imes, he ad en o digi iza ion has in oduced a
mul i ude o no el pa icipan s in o he ealm o en ep eneu ial inance
(Allen, Gu, & Jag iani, 2021). In he dynamic en ep eneu ial inance
en i onmen , equi y c owd unding has eme ged as a compelling und-
aising mechanism o nascen en e p ises (Belle lamme, Lambe , &
Schwienbache , 2014). Equi y c owd unding in ol es en ep eneu s
issuing a public in i a ion o sell a se quan i y o hei company’s equi y
sha es h ough an in e ne pla o m ha acili a es he ansac ions.
In es o s equen ly engage in hese campaigns o achie e a mone a y
gain. Consis en wi h his pe spec i e, Visma a (2016) obse es ha he
p o ision o incen i es o in es o s does no enhance he likelihood o
achie ing success in equi y c owd unding campaigns.
Simila ly, (Cholako a & Cla ysse, 2015) disco e ed ha non-
inancial mo i a ions do no exe a no ewo hy in luence on he in-
es men decisions made in he con ex o equi y c owd unding. Equi y
c owd unding ep esen s a comp ehensi e and eme ging a enue o
accessing isk inancing. Acco ding o Visma a (2016), he ypical
magni ude o campaigns on UK pla o ms is app oxima ely £250,000.
Equi y c owd unding p esen s a signi ican oppo uni y o enhance he
inancial inclusi i y o en ep eneu ial g oups ha ha e adi ionally
aced subs an ial obs acles in ob aining inancial esou ces. Decision-
make s widely ega d equi y c owd unding as a powe ul ool o
os e ing job c ea ion, p omo ing economic g ow h, and enhancing
compe i i eness. The use ’s ex is al eady academic. Equi y c owd-
unding possesses an inclusi e cha ac e is ic ha ex ends o small in-
es o s (D. Cumming, Meoli, & Visma a, 2019). I p esen s a no el
op ion o hese in es o s o pa icipa e in he in es men o small p i-
a e en e p ises. The pa icipa ion o a subs an ial quan i y o indi idual
in es o s also gi es ise o app ehensions ega ding he sa egua ding o
hese in es o s and hei capaci y o con ibu e alue-enhancing ele-
men s o nascen en e p ises.
Appiah-O oo & Chen (2023) Examining he e ec o c owd unding
on ca bon dioxide emissions (CO
2
E). Applying a da ase encompassing
32 coun ies spanning 2013 o 2020, hey ound ha c owd unding e-
duces CO
2
E, wi h a 10 % inc ease in c owd unding leading o abou 0.1
% educ ion in CO
2
E. The analysis also e eals ha c owd unding e-
duces CO2E only a e a aining a h eshold o 5.938, a ound $379
million. The mechanism analysis shows ha c owd unding dec eases
CO
2
E h ough economic g ow h and inancial de elopmen . Finally,
he e exis s eedback causali y be ween c owd unding and CO
2
E.
In hei s udy, Abdallah and Younis (2023) analyze he impac o
FinTech, C owd unding, and In o ma ion Technology (IT) on Nonp o i
o ganiza ions (NPOs). Exis ing li e a u e indica es ha non-p o i o -
ganiza ions (NPOs) a e inc easingly adop ing inancial echnology
(FinTech), c owd unding, and in o ma ion echnology (IT) se ices o
enhance hei ope a ional e iciency and o e all e ec i eness. The in-
luence o FinTech, C owd unding, and IT on NPOs is e alua ed using
Web-based Se ices and he Technology Accep ance Model (TAM).
Abdeldayem and Aldulaimi (2023) Ha e he in oduc ion o a no el
c owd unding pa adigm called Islamic Sha ¯
ıʿah-complian c owd und-
ing (ICF). Fu he mo e, he con en analysis un eiled ou p ima y
opics ha se e as he undamen al pilla s o he de elopmen o he
ICF model. The Islamic Sha ia p o isions include he P ojec Idea (Halal)
a 28.5 %, Funding Goal a 36 %, Re u n and Risk a 14 %, and Funding
Commi men s a 21.5 %. The indings indica e ha all ou ypes o
c owdsou cing ( ewa d-based c owd unding, dona ion-based c owd-
unding, loan-based c owd unding, and equi y-based c owd unding) a e
pe missible and subs an ia ed by e idence om he Qu an and Sunnah.
When, Acco ding o he p oposal by KH and Al A i (2023), he esul s
indica e he possibili y o u ilizing he Islamic c owd unding model as an
Md.A. Halim
Resea ch in Globaliza ion 9 (2024) 100238
3
al e na i e means o ob aining inance o a ac po en ial in es o s.
Manawa , Luki a, and Me ia (2023) Examine in e na ional in ech
bes p ac ices and explo e hei po en ial o enhance he economic se-
cu i y o indi iduals in unde de eloped na ions. The conce ns we e
ca ego ized in o h ee dis inc g oups: a sca ci y o in as uc u e, a
socie y ha exhibi s educed eliance on echnology, and an uno ga-
nized and chao ic cul u e. The h ee in ech companies ha bes
exempli y he h ee ca ego ies we e subsequen ly analyzed: Mic o
Financing, C owd unding, and Digi al paymen sys ems. Howe e , Eq-
ui y c owd unding pla o ms e ec i ely align he inancing needs o
en ep eneu ial companies wi h he money p o ided by in es o s
(Bu ic`
e & Visma a, 2022).
P e ious s udies con ibu e o Financial Inclusion and Co po a e
Go e nance (Assadi & W oldsen). C owd unding pla o ms and inan-
cial se ices (Dehghani, Piwowa -Sulej, Sala i, Leone, & Habibollah,
2023). Regula o y Con ex s, Fin ech Inno a ion and Financial Inclusion
(Ray, Paul, & Miglani). En i onmen al and c owd unding (Appiah-O oo
& Chen, 2023). C owd unding and Financial Technology (Abdallah &
Younis, 2023). Islamic c owd unding model and inance SMEs (Abdel-
dayem & Aldulaimi, 2023). Sha ia C owd unding and Financing solu-
ion (KH and Al A i (2023)). E olu ion o Financial Technology
(Manawa , Luki a, & Me ia, 2023). Inclusi e digi al inance and equi y
c owd unding (Bu ic`
e & Visma a, 2022). Financial Inclusion, Co po a e
Go e nance, Con en ional Mic o inance and Digi al C owd unding
(Assadi & W oldsen). C owd unding and inancial inclusion (Kapoo &
Sha ma, 2022). Role o FinTech, inno a ions, and digi al inancial in-
clusion (Rauniya , Rauniya , & Sah, 2021). Financial inclusion and
c owd unding (Babe , 2021). Oppo uni ies and challenges o C owd-
unding in A ica (Chao, Se waah, Baah-Pep ah, & Shneo , 2020).
Adop ion o Financial Technology and C owd unding (P ananing yas &
I awa i, 2021). So, his s udy di e s om he abo e pape s. This s udy
con ibu es o “Does C owd unding Con ibu e o Digi al Financial In-
clusion?” in his a ea by answe ing his ques ion.
The eme gence o equi y c owd unding has acili a ed he inclusion
o a subs an ial numbe o indi idual in es o s in en ep eneu ial
inancing (D o e , Wood, & Co be , 2018). C owd in es o s may
exhibi di e gen unding decisions compa ed o p o essional in es o s,
such as business angels and en u e capi alis s (Fishe , Ku a ko,
Bloodgood, & Ho nsby, 2017). C owd in es o s, in luenced by a ious
in es ing a ionales (Visma a, 2019), ha e he po en ial o enhance he
inclusi eness o inancial ma ke s by acili a ing access o unding o
en ep eneu s om unde ep esen ed g oups. Equi y c owd unding
pla o ms e e o online pla o ms ha enable he aising o capi al by
businesses o indi iduals by selling secu i ies o many in es o s. These
pla o ms p o ide an Acco ding o (D. Cumming, Meoli, & Visma a,
2021), he e is no e idence o disc imina ion agains emale e hnic en-
ep eneu s. These en ep eneu s ha e been ound o a ain c owd-
unding pe o mances ha a e compa able o o e en g ea e han hose
o hei male o local coun e pa s. The e o e, p elimina y e idence
indica es ha equi y c owd unding p esen s he po en ial o enhance
inancial inclusi i y.
The emaining sec ions o his s udy a e as ollows: ad an ages o
C owdFunding, C owdFunding model, Success ul de elopmen by
in luencing componen s on C owdFunding pla o ms, Ma ke le el o
global digi al inancial and Discussion, he h ea o C owdFunding, and
inally, conclusion and u u e di ec ion.
2. Ad an ages o C owdFunding
C owdFunding is online-based and has a ious ad an ages. I is a
C owdFunding (CF) in es men und wi h access o housands o
ecognized in es o s who can iew, communica e, and sha e you
und aising campaign. C owd- unding p omo es all aspec s o you
business. By enabling i , you a e going h ough he in aluable p ocess o
ge ing you business o he op wi h his o y, o e s, ac ion, add ess-
able ma ke , and p ice o e s, making i an easily diges ible package. You
can sha e and p omo e you C owdFunding campaign h ough social
media, e-mail messages, and online ma ke ing acking. The bes hing
abou online C owdFunding is i s capaci y o inco po a e and smoo h
ou you und aising endea o s. By building a single, ex ensi e p o ile o
which you can channel e e y one o you possibili ies and po en ial
in es o s, you dispense wi h he need o seek a e e e y one o hem
exclusi ely.
3. C owdFunding models
3.1. Rewa d-based C owd-Funding business model
The ac i i y o a business o succeed is o iden i y i s a ge cus-
ome s. A e iden i ying he a ge cus ome s o he o ganiza ions,
dis ibu ion channels need o be se up, and cus ome ela ionships need
o be buil up. The o ganiza ion needs o be su e abou he a ge
cus ome using bo h he dis ibu ion channel and he cus ome ela-
ionship. O ganiza ions can c ea e alue p oposi ions when hey can
ensu e hei a ge cus ome s. Then, hey can use hei co e compe ence
and esou ces and c ea e a cos s uc u e. Finally, hey can make a p o i
model. The p o i model depends on he alue p oposi ion and cos
s uc u e (PIK, 2019). Fig. 1 shows he Rewa d-Based C owd-Funding
Business Model.
Ini ially, c owd unding was u ilized o ga he inancial esou ces o
cul u al o social ini ia i es ha we e no d i en by economic mo i es
(Pichle & Tezza, 2016). Rewa d-based C owd unding subsidizing in-
cludes people con ibu ing o you business in e u n o a “ ewa d,”
commonly a ype o he i ems (p oduc o se ices) o adminis a ion
you o ganiza ion o e s. E en hough his s a egy o e s pa ons a
ewa d, i ’s despi e e e y hing gene ally iewed as a subse o dona ion-
based C owdFunding as he e is no equi y o inancial e u n. The
impe us o engaging in a campaign may s em om non-mone a y ac-
o s, such as he desi e o ad oca e o a speci ic ideology o o assis
ma ginalized g oups (Allison, Da is, Sho , & Webb, 2015). F om his
s andpoin , ewa d-based c owd unding holds he po en ial o acili a e
he es ablishmen o small en e p ises and ensu e he inancial s abili y
o small-scale a me s ope a ing wi hin he ag icul u e indus y. P o-
duce s o ag icul u al commodi ies ha e he po en ial o o e supple-
men a y engagemen oppo uni ies h ough collabo a ions wi h a ms
and es au an s. Funde s can con inuously ob ain eliable ood sou ces
by es ablishing pa ne ships wi h und aise s (Yoo & Choe, 2014). In
ewa d-based c owd unding, in es o s p ima ily unc ion as p osume s,
engaging in he ac o pu chasing he o e ed p oduc s. This app oach
can po en ially educe he likelihood o inancial losses o in es ees and
encou age unde s o ad oca e o he consequences (Belle lamme,
Om ani, & Pei z, 2015).
3.2. Communi y-based C owdFunding business model
In Sel -ini ia i e C owd unding, an en ep eneu can c ea e his
websi e o a sepa a e blog o aise money. The en ep eneu himsel also
p omo es his unds h ough his websi e. An independen C owdFunding
ecei es a ixed ee om he unds aised. In es o s in his C owd-
Funding usually do no ecei e inancing ewa ds om hei po ion o
he in es men (dona ion-based C owdFunding). On he o he hand,
hey ecei e some o m o inancial bene i ( ewa d-based C owdFund-
ing) (Adhika y & Ku suna, 2016). Fig. 2 shows he Communi y-based
C owdFunding business model.
3.3. Seg ega ed clien model
The clien -seg ega ed Models show ha lende s p o ide loans o
bo owe s h ough he C owdFunding pla o m. The C owdFunding
pla o m keeps sepa a e accoun s o lende s and bo owe s so ha
lende s and bo owe s can a oid con lic s. This calcula ion assu es
lende s and bo owe s ha hey will p o ec hem om bank up cy e en
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Resea ch in Globaliza ion 9 (2024) 100238
4
i i ails. I collec s a speci ied ee (a la a e o a pe cen age o he o al)
om he bo owe o loan o igina ion. On he o he hand, i akes
adminis a ion ees o loan se ice and paymen collec ion om he
lende . The C owdFunding pla o ms cha ge ex a ees o addi ional
se ices, such as selling loan po olios in he seconda y ma ke (Ki by &
Wo ne , 2014). Fig. 3 shows he Seg ega ed Clien Model.
3.4. No a y model
The no a y model is used in he Uni ed S a es (Ki by & Wo ne ,
2014). The C owdFunding pla o m does no ac as a loan o igina o . I
in oduces indi idual lende s o bo owe s so lende s can bid on he
amoun hey wan in hei po olios. The bank wo ks as a loan o igi-
na o . The C owdFunding pla o m only issues no es o each lende o
con ibu e o hei loan. As a esul , he isk o non- epaymen loans
shi s om he loan o igina o (bank) o he lende . The C owdFunding
pla o m also collec s ees om lende s, bo owe s, and he clien -
seg ega ed accoun model (Adhika y & Ku suna, 2016). Fig. 4 shows
he No a y Model.
3.5. Gua an eed e u n model
The gua an eed e u n model is he mos popula in China. I is used
by he C edi Face pla o m (PIK, 2019); (Ki by & Wo ne , 2014). The
loan o igina o p o ides he loan wi h a gua an eed e u n. The loan
o igina o gi es a gua an eed e u n o he lende on behal o he
bo owe h ough a CFP. The CFP ac s as a loan o igina o . The bo owe
has o pay in e es a 12 % wi h an addi ional e m o 2 weeks.
On he o he hand, he lende has o pay 12 % in e es . The CFP
cha ges a ee om bo h pa ies. I is p ac iced by T us Body
Fig. 1. Rewa d-Based C owd-Funding Business Model Sou ce- cons uc ed by Au ho ’s.
Fig. 2. Communi y-based C owdFunding business model. Sel -ini ia i e C owdFunding Independen C owdFunding.
Md.A. Halim
Resea ch in Globaliza ion 9 (2024) 100238
5
In e na ional AB in No way (PIK, 2019). Fig. 5 shows he Gua an eed
Re u n Model.
3.6. Equi y-based CF model
The equi y-based CFP shows ha a i m o e s a CFP o p omo e i s
sha es. The CFP hen in i es in es o s o buy i m sha es h ough a ious
means o communica ion like social media and pe sonal ne wo ks. A e
Fig. 3. Seg ega ed Clien Model. Sou ce- (Ki by & Wo ne , 2014), cons uc ed by Au ho ’s.
Fig. 4. No a y Model. Sou ce-(Adhika y & Ku suna, 2016), cons uc ed by Au ho ’s.
Md.A. Halim
Resea ch in Globaliza ion 9 (2024) 100238
6
buying o ganiza ion sha es, in es o s become equi y s akeholde s and
ecei e di idends. Since in es o s a e equi y s akeholde s, any isk
a ising in he o ganiza ion also alls on he in es o . Since he in es o
also ca ies he isk, he o ganiza ion o indi idual en ep eneu ’s isk
dec eases. CFP ecei es a la ee om he i m o conduc ing public
ela ions ac i i ies and a la a e on he numbe o unds aised om he
i m. Equi y-based CF is conside ed he mos sui able o young i ms
and s a up i ms. Because, in a sho pe iod, hose companies can
ecei e la ge amoun s o non-con ac ual unds om CFP ha play a
i al ole in boos ing hei g ow h. C owd-cube is he bes example in he
UK (Ki by & Wo ne , 2014). Fig. 6 shows he Equi y-based CF Model.
Unlike c owd-based and dona ion-based s a egies, equi y-based
C owdFunding pe mi s con ibu o s o in es o s o become pa -
owne s o you o ganiza ion by ading capi al o equi y sha es. Eq-
ui y owne s ge a inancial p o i o ewa d o hei in es men and a
po ion o he income h ough dis ibu ion o di idends.
Fig. 5. Gua an eed Re u n Model. Sou ce- cons uc ed by Au ho ’s.
Fig. 6. Equi y based CF Model. Sou ce- cons uc ed by Au ho ’s.
Md.A. Halim
Resea ch in Globaliza ion 9 (2024) 100238
7
Lending-based c owd unding has he po en ial o se e as an e ec-
i e mechanism o mi iga ing inancial exclusion. I is because adi-
ional banks ope a e on a e enue model, which inc eases he likelihood
o disc imina o y p ac ices agains indi iduals who a e economically
disad an aged o ha e low incomes. The c ea ion o new inancial al-
e na i es, such as c owdsou cing, has been signi ican ly in luenced by
e o s o add ess he limi a ions o adi ional inance and ad ance-
men s in echnology. C owd unding can educe he dispa i y be ween
he a ailabili y and equi emen o inancial esou ces o en ep e-
neu ial endea o s (B u on, Kha ul, Siegel, & W igh , 2015). Lending-
based c owd unding has eme ged as a no el app oach o enhance
c edi a ings and se e as an al e na e means o und aising. When
bo owe s ul ill hei loan epaymen obliga ions wi hin he designa ed
ime ame, hey ha e he po en ial o enhance hei o al c edi wo -
hiness, hence inc easing hei likelihood o ob aining loans om
al e na i e unding sou ces in subsequen ins ances (Ash a, Assadi, &
Ma akka h, 2015).
3.7. C owd- unding asse secu i ized model
The CF asse Secu i ized model is a complex model om o he
models. This model pe o ms some di e en ac i i ies om he o he
models. The CF asse -secu i ized model c ea es ma ke able deb secu-
i ies ins ead o loan asse s and links hem o he o ganized secu i ies
ma ke . The CFP builds ehicles o an SPV o issue, collec sales
p oceeds, p o ide deb secu i ies, and pay he in es o s an obliga ion
(in e es & p incipal). The SPV can hi e mo e p o essional me chan
banke s o secu e an o ganized ma ke o a ixed ee o commission.
Fig. 7 shows he C owd- unding Asse Secu i ized Model.
3.8. Dona ion-based C owdFunding
Ex ensi ely, you can hink abou any g oup C owdFunding campaign
in which he e is no inancial ewa d o e u n o he con ibu o s o
in es o s as dona ion-based C owdFunding. Dona ion-based C owd-
Funding ac i i ies include und aising o cha i ies, non-p o i s, disas e
elie , and medical bills. Dona ion-based c owd unding elies on
olun a y con ibu ions owa ds a common good. I esembles con en-
ional campaigns conduc ed by cha i able and non-go e nmen al o ga-
niza ions (NGOs). A c owd unding pla o m ha ope a es on a dona ion-
based model se es as an in e media y o cha i able o ganiza ions and
non-go e nmen al o ganiza ions (NGOs). C owd unding has he po en-
ial o o e ini ial inancial suppo o a ious ini ia i es aimed a
enhancing women’s inancial inclusion. These ini ia i es may include
ac i i ies such as enhancing inancial li e acy, p o iding li e skills and
business aining, and enhancing heal h and sa e y measu es (Roig-
Tie no, Blasco-Ca e as, Mas-Tu , & Ribei o-Na a e e, 2015).
In he con ex o unding o social en e p ises, dona ion-based o
ewa d-based c owd unding has eme ged as a po en ially iable
me hod. This is because indi iduals con ibu ing o c owd unding
Fig. 7. C owd- unding Asse Secu i ized Model. Sou ce- cons uc ed by Au ho ’s.
Md.A. Halim
Resea ch in Globaliza ion 9 (2024) 100238
8
campaigns a e mo e inclined o p io i ize p o iding public goods a he
han expec ing inancial e u ns on hei in es men s. Addi ionally, so-
cial en e p ises, which a e s uc u ed o se e he public in e es , align
well wi h he objec i es and alues o c owd unding unde s (Aus in,
S e enson, & Wei–Skille n, 2006; Ge be , Hui, & Kuo, 2012).
3.9. Deb -based C owdFunding
Bo owe s apply on he web, commonly o ee. Thei applica ion is
audi ed and checked by an au oma ed sys em ha decides he bo -
owe ’s in e es a e and c edi isk, de ined as deb -based C owd-
Funding. In es o s pu chase secu i ies in a und, which makes he
c edi s o a bundle o bo owe s. The in es men b ings in cash om
en husiasm o he uns able loans; he me hod makes money by aking a
le el o he loans & a loan se icing ee.
4. Success ul de elopmen by in luencing componen s on
C owdFunding pla o ms
Resea che s p o ided some easons ha in luence he CF indus y’s
success ul de elopmen . Fi s , CF pla o ms o e a new unding p oba-
bili y o in es o s (Xu & Ge, 2017). The e is a lack o in es men op-
po uni ies in he adi ional way. Hence, he appea ance o CF sys ems
gi es a new in es men oppo uni y o he ma ke & educes he
sho age o unding oppo uni ies in he p esen ma ke . The second one
is ha he isks o c edi in es men s a e shi ed and sp ead (Xu & Ge,
2017). Bo h in es o s and unde s ha e lowe in es men isks in he CF
sys em. An in es o in es s a small amoun o money in he CFP. I he
CF sys em ails o pe o m success ully, he unde s will no ha e o
epay all he unds o he in es o s. Fig. 8 o ecas s he numbe o mobile
de ices wo ldwide om 2020 o 2025. (Sou ce: S a is a 2023).
Fo succeeding CF pla o ms, hey e e o some easons besides
hese: Mobile banking and In e ne de elopmen (Zheng, 2017). The
numbe o mobile use s will be 18.22 billion. In es o s and und aise s
can be able o know a ailable in o ma ion h ough he In e ne o ensu e
he in o ma ion balance. CF can ad e ise i sel h ough he In e ne ,
whe eas adi ional businesses canno . They said go e nmen suppo
mus build up he CFP success ully (Zheng, 2017). PIK (2019) e e ed o
he idea ha i a CF p ojec desi es success, i should use a ious business
models in di e en en i onmen s (Chen, 2017).
5. Ma ke le el o global digi al inancial and discussion
Table 1 shows he ma ke le el o global digi al inancial inclusion
s a is ics. The de e mina ion o high and low alues is con ingen upon
he analysis o a e age da a. A alue ha is equal o o mo e han he
a e age alue is indica i e o a high alue, while a numbe ha is below
he a e age alue is indica i e o a low alue. The Global Financial In-
clusion Index, in i s second i e a ion, e alua es he pe o mance o wo
ma ke s based on h ee key dimensions o inancial inclusion: go e n-
men , inancial sys em, and employe suppo . This assessmen aims o
es ablish a s anda dized measu e o compa ing inancial inclusion
ac oss a ious economies wo ldwide. The index amalgama es di e se
da a sou ces o c ea e a consolida ed me ic o inancial inclusion a he
ma ke le el. Amids he p esence o complex mac oeconomic and
geopoli ical ci cums ances ac oss se e al egions, he p ima y disco e y
o he 2023 Global Financial Inclusion Index is encou aging. The anal-
ysis e eals a gene al upwa d end in inancial inclusion ac oss he 42
ma ke s examined.
Singapo e con inues o main ain i s posi ion as he mos inancially
inclusi e ma ke . Singapo e is posi ioned a he op ega ding he pilla s
o go e nmen assis ance, employe suppo , and inancial sys em sup-
po , anking i s , second, and hi d, espec i ely. Singapo e’s
ad ancemen in he employe suppo pilla is ema kable, as i expe-
ienced a signi ican ise o 12 posi ions om i s p e ious anking o
14 h in 2022 (Sou ce: The Global Financial Inclusion Index 2023).
2
Table 1 shows ha Singapo e digi al inancial inclusion (DFI)
SCORE-2023 is shown 73.90 which is g ea e han Hong Kong (71.09,
second posi ion), Swi ze land (68.43, hi d posi ion), Uni ed S a es
(66.21, ou h posi ion), Sweden (65.47, i h posi ion), Denma k
(65.25, six h posi ion), Uni ed Kingdom (60.82, se en h posi ion) and
all o he coun ies. When DFI SCORE-2022 is shown Singapo e is 68.88
which also is g ea e han Hong Kong (65.16, ou h posi ion),
Swi ze land (63.42, eigh h posi ion), Uni ed S a es (67.13, second po-
si ion), Sweden (65.20, hi d posi ion), Denma k (63.87, six h posi ion),
Uni ed Kingdom (56.93, ou een posi ion) and emaining o he coun-
ies (Sou ce: The Global Financial Inclusion Index 2023).
Table 1 shows ha Singapo e Go . Suppo −2023 sco e is 75.32
which is g ea e han Hong Kong (75.30, second posi ion), Swi ze land
(71.65, hi d posi ion), Uni ed S a es (54.91, nine een h posi ion),
Sweden (64.16, eigh h posi ion), Denma k (65.75, six h posi ion),
Uni ed Kingdom (57.56, hi een h posi ion) and all o he coun ies.
When Go . Suppo −2022 sco e is shown Singapo e is 69.51 which
also is g ea e han Hong Kong (62.17, eigh h posi ion), Swi ze land
(66.77, second posi ion), Uni ed S a es (54.40, i een h posi ion),
Sweden (64.76, six h posi ion), Denma k (65.01, i h posi ion), Uni ed
Kingdom (59.36, nin h posi ion) and emaining o he coun ies.
Whe eas Table 1 shows ha Singapo e inancial suppo sys em (FSS)
and employe sys em (ES) is 70.74 and 81.75 whe e posi ion is hi d and
second espec i ely in he yea 2023 (Sou ce: The Global Financial In-
clusion Index 2023).
In con as , Babe (2021) disco e ed ha he majo i y o Eu opean
coun ies ha e a subs an ial p opo ion o hei popula ions in eg a ed
in o he o mal inancial sys em, enabling hem o a ail hemsel es o a
wide ange o inancial se ices p o ided by hese ins i u ions.
Fu he mo e, he pas ew yea s ha e wi nessed a signi ican su ge in he
unds ecei ed and ini ia i es suppo ed h ough c owd unding, hanks
o he widesp ead adop ion o Fin ech se ices in hese na ions.
The e has been a ma ginal decline in inancial inclusion inside he
Uni ed S a es. Ne e heless, i con inues o occupy a p ominen posi ion
in he gene al ankings, secu ing he ou h spo while also e aining i s
leading posi ion in he pilla o inancial sys em suppo . The na ion
wi nessed a dec ease in bo h he employe and go e nmen suppo
sec o s.
The p og ess o inancial inclusion is pa icula ly p onounced in
ma ke s ac i ely cons uc ing inancial sys ems ha le e age echnol-
ogy. The coun ies ha ha e had he mos signi ican inc eases in eco-
nomic g ow h include a numbe o eme ging economies, namely B azil,
Thailand, Vie nam, and Sou h Ko ea.
Financial inclusion in he wo ld’s majo coun ies is expe iencing a
s a e o s agna ion o decline. The ma ke s unde conside a ion exhibi
mode a e a ings in he pilla s o go e nmen and inancial sys em
suppo while consis en ly displaying low a ings in he pilla o
employe suppo . The economies o Sou heas Asia a e expe iencing
signi ican ad ancemen s in he ealm o inancial inclusion. A decline in
he esponsibili y o employe s o p omo e inancial inclusion is
obse ed in a clus e o Asian economies, as hese ma ke s ecei e
inc eased assis ance om hei own go e nmen s and inancial
ins i u ions.
The e exis s a obus and posi i e co ela ion be ween ad ancemen s
in inancial inclusion and imp o emen s in a ious indica o s o social
and economic de elopmen , including educed le els o co up ion and
enhanced economic independence, esilience, and p oduc i i y.
The e is a disce nible co ela ion be ween he le el o ma ke
ma u i y and he p ima y sou ce o suppo . In indus ialized economies,
obus go e nmen and inancial sys em assis ance equen ly leads o
2
h ps://www.p incipal.com/ inancial-inclusion/da a- esou ces.
Md.A. Halim
