Business or Basic Needs? The Impact of Loan Purpose on Social Crowdfunding Platforms

Hadar Gafni, Marek Hudon and Anaïs Périlleux ()

ULB Institutional Repository from ULB -- Universite Libre de Bruxelles

Abstract: Crowdfunding has created new opportunities for poor microentrepreneurs. One crucial question is the impact that the purpose of a loan—either business investment or basic necessities—may have on the success of a campaign. Investigating a prosocial crowdfunding platform, we find that loans taken out to meet basic needs are funded faster than business-related loans, especially for small amounts, which can be explained by the prosocial motivation of microlenders. Moreover, female microborrowers are funded faster than men, especially for basic needs loans. Our results therefore suggest an ethical blind spot, since prosocially motivated crowdlenders may unintentionally end up producing adverse effects, replicating gender role by supporting women to a lesser extent when they apply for business loans. This finding expands prosocial motivational theory in ethical finance.

Keywords: Basic necessities; Business loans; Crowdfunding; Ethical finance; Gender preference; Microfinance; Microlending (search for similar items in EconPapers)
Date: 2020-05-01
New Economics Papers: this item is included in nep-cfn, nep-mfd and nep-pay
Note: SCOPUS: ar.j
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Citations: View citations in EconPapers (1)

Published in: Journal of business ethics (2020)

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Journal Article: Business or Basic Needs? The Impact of Loan Purpose on Social Crowdfunding Platforms (2021)
Working Paper: Business or basic needs ?The impact of loan purpose on social crowdfunding platforms (2020)
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