Can microfinance crowdfunding reduce financial exclusion? Regulatory issues

Purpose - The purpose of this paper is to discuss how regulatory environment can be a fundamental constraint or lever in defining the scope of operations of a social innovation. Design/methodology/approach - Semi-structured interviews with top-level executives of pioneers of crowdfunding were run in India and France, two of the three leading countries in this field. Findings - Four main issues rise: choice of legal status, constraints for the operations model, compliance with anti-money laundering measures and challenges in marketing and sustainability. Originality/value - This paper contributes to knowledge advancement in the field of this new funding actor that could challenge the banking system. This is the first paper to explore these regulatory issues and their impact on marketing practices.