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

Hadar Gafni (), Marek Hudon () and Anaïs Périlleux ()
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Hadar Gafni: Copenhagen Business School
Marek Hudon: Université Libre de Bruxelles (U.L.B.), CEB & CERMi

Journal of Business Ethics, 2021, vol. 173, issue 4, No 7, 777-793

Abstract: 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: Crowdfunding; Business loans; Basic necessities; Ethical finance; Microfinance; Microlending; Gender preference (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (8)

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DOI: 10.1007/s10551-020-04530-4

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