Crowdfunding and entrepreneurial/SME finance: regulatory framework for financial inclusion

Habib Ahmed ()
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Habib Ahmed: Durham University Business School, Durham University

Journal of Banking Regulation, 2025, vol. 26, issue 3, No 11, 503-517

Abstract: Abstract Crowdfunding is considered an efficient alternative to traditional sources of finance that can enhance financial inclusion and reduce financing gaps faced by entrepreneurial firms and small and medium enterprises (SMEs). The growth of crowdfunding platforms (CFPs), however, depends on an enabling regulatory regime that can promote the objectives of innovation and financial inclusion on the one hand and mitigate the concerns of financial stability and consumer protection on the other hand. This article identifies some key elements of a sound regulatory framework that can promote CFPs to enhance entrepreneurial/SME finance and give opportunities to retail investors to invest in alternative assets while protecting them from large losses. The framework is used to assess regulatory regimes of CFPs in four GCC countries (Bahrain, Oman, Saudi Arabia and United Arab Emirates) by using content analysis of the relevant laws and regulations. The results show varied regulatory regimes in terms of institutional frameworks, types and scope of CFPs, the financing requirements for firms seeking funds and investment opportunities available to retail investors. The article concludes that the appropriate design of regulatory regimes is important for determining the scope of CFPs and their role in enhancing entrepreneurial/SME financing and financial inclusion.

Keywords: Crowdfunding; Entrepreneurial/SME finance; Financial inclusion; Regulations (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1057/s41261-025-00273-2

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