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Impact Investing Through Crowdlending: Examining the Role of Intermediation and the Potential for Development Banks

Impact Investing Through Crowdlending: Examining the Role of Intermediation and the Potential for Development Banks
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Year:    2020

Author:    Lee, Andrew, Weiland, Christiane

Vierteljahrshefte zur Wirtschaftsforschung, Vol. 89 (2020), Iss. 3 : pp. 99–118

Abstract

Summary: Development banks are facing changing market conditions with low interest rates, rapid technological change, and an increased interest in impact investment. This combination of factors challenges traditional processes and business models, but also provides a chance to develop new and sustained business opportunities. We examine examples of impact investment crowdfunding platforms in an international and domestic context. We evaluate their organisational structure, especially in connection with the potential integration of an intermediary and possible conflicts of interest. Our analysis provides both economic justification for activities of promotional and development banks in this area and new inputs for expanding their business model with a transparent and trustworthy financial lending instrument for small-scale retail investors.

Journal Article Details

Publisher Name:    Global Science Press

Language:    English

DOI:    https://doi.org/10.3790/vjh.89.3.99

Vierteljahrshefte zur Wirtschaftsforschung, Vol. 89 (2020), Iss. 3 : pp. 99–118

Published online:    2020-07

AMS Subject Headings:    Duncker & Humblot, Duncker & Humblot

Copyright:    COPYRIGHT: © Global Science Press

Pages:    20

Keywords:    G21 L3 L14 Development banks platform business models crowdlending impact investing microfinance intermediation

Author Details

Lee, Andrew

Weiland, Christiane

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Section Title Page Action Price
Andrew Lee and Christiane Weiland: 99
 Impact Investing Through Crowdlending: Examining the Role of Intermediation and the Potential for Development Banks 99
1 Introduction 100
2 Environment and dynamics for promotional banks and development finance institutions 101
2.1 Broad range of approaches in development finance and promotion 101
2.2 Digitalisation creates opportunities for new business models and processes 102
2.3 Implications of low interest rate environment and shift in societal values 103
3 Impact investing through crowdlending platforms 105
3.1 Crowdlending platforms with an international focus: Kiva and Zidisha 105
3.2 Crowdlending with a domestic or regional focus: GLS Crowd and L-Bank MikroCrowd 106
4 Evaluation of the different organisational structures of the platforms 99
4.1 Granularity on borrower and lender side 99
4.2 Role of a potential intermediary and incentive effects 99
5 Development banks as an intermediary in impact investment structures 99
5.1 Providing expertise while minimizing conflicts of interest 99
5.2 Reducing uncertainty and providing impact investment opportunities for small private investors 99
5.3 Use of new technologies 99
6 Summary 99
References 99