Crowdfunding is an innovative way of financing projects that allows anyone to contribute money online and support various initiatives, such as businesses, causes, or solutions. However, traditional crowdfunding platforms face some challenges, such as lack of transparency and security, high fees, and limited control over the funds by the contributors and the project owners. Blockchain technology, which is a P2P, decentralized ledger, which is distributed can offer a more reliable, secure, and transparent solution for crowdfunding. Blockchain-based crowdfunding can leverage smart contracts, which are self-executing agreements that encode the rules and conditions of the funding process and ensure that the funds are released only when the predefined criteria are met. This paper aims to propose a concept for designing efficient smart contracts for crowdfunding, which can enable both the contributors and the project owners to have more control and influence over the funds and the project outcomes. Unlike the existing literature-based ideas, our proposed method not only allows the contributors to invest their own money, but also guarantees them that their token values will be preserved. This method can be integrated without disrupting the existing logic of the blockchain. The methodology provides higher control and transparency for all the parties involved in the crowdfunding process.
<em>This article looks at whether financial regulations and Government policies have an impact on microfinance institutions operations in Ghana. It also looks at contributions that regulations and policies have on microfinance sector development in the country. The methodology for this paper is purely qualitative. The needed information was gathered from primary & secondary sources. The primary data source used face to face interviews, telephonic and through emails conducted with regulators, policymakers and microfinance institutions managers, using interview guide and focus group discussion guide. The secondary source was through literature reviews, books, journals, and the internet. The study revealed that financial regulations and government policies have contributed immensely to microfinance sector development through, training & capacity building, checks & balances, protecting customers & depositors, financial soundness and financial inclusion. However, despite the contribution of regulations and the policies to the sub-sector, the result of the study also identified poor regulations, lack of proper decentralization, lack of knowledge and weakness of regulators as problems with financial regulation. Furthermore, it also found out that, the policies formulated are weak and the implementation, monitoring, and supervision of the institutions is insufficient and ineffective. This article, therefore, recommends that Apex bodies should be involved in monitoring and supervision, minimum capital requirements should be made moderate, powers should be decentralized to the regional level for the effective functioning of regulations & policies in the country.</em> <strong><em>Keywords</em></strong><em>: Bank of Ghana, Regulations, Ministry of Finance, Policy Formulation, Microfinance Institutions.</em>
Technological advancements in the provision of financial services are transforming the economic landscape by providing opportunities for financial institutions, corporate sector, and consumers. Financial technologies (fintech) offer broader economic development and inclusive growth and facilitate international payments and remittances. Fintech applications, such as mobile wallets and crowdfunding that are hugely successful, especially in developing countries such as India, are examples of how simple technologies can enhance financial inclusion through the decentralized provision of payments, borrowings, and risk management. However, these innovations also create challenges for regulators. The emerging fintech models raise concerns on investor protection, adequacy of existing regulations and potential threats to financial stability, leading to questions on the policies and institutional framework required to tap into the benefits of these technologies securely. In this paper, we look at the landscape of fintech companies and their suitability for financing sustainable development. The paper also examines the policy and institutional frameworks required for the effective utilization of fintech for sustainable development. Fintech has the potential to involve the private sector to finance sustainable development and hence the paper would be of interest to policymakers, particularly in developing countries, as many struggles to bridge gaps in financing their sustainable development goals (SDGs)
Abstract Agricultural extension programs have changed significantly over the past four decades. What has changed and why? Have these changes affected adoption of innovations by farmers? What if anything should policy makers and extension agencies do differently, particularly in developing countries? Structural changes in agriculture, new types of agricultural technologies, tight public budgets, efforts to decentralize government, and emerging information and communication technologies (ICT) have led to pluralistic and, in some cases, lowerâcost extension and advisory services that combine public and private mechanisms for financing and implementing extension activities. Farmer groups and virtual networks play a growing role in technology diffusion, and extension services can exploit these networks using the latest ICT approaches .
The present paper analyzes the potential of crowdfunding as an alternative source for financing the economy, but also the limitations of the process and the current gaps. Structured as a practical guide in the field, the study offers examples of crowdfunding platforms, systemizing the theoretical background of the concept in accordance with the Romanian context. Community financing is still poor understood by the Romanian public, the analysis focusing on a consistent literature review that reach the mechanism and the main typology of the crowdfunding platforms, defining the concept and exploring its novelty. Legal regulations and technological development are also considered in the frame of the Industry 4.0, revealing the advantages of using the Fintech tools for both investors and entrepreneurs. Due to the distributed risks, the crowdfunding platforms make easier the investment effort, while still protecting the rights of the capital-seeking. The next step of this evolutionary process is the integration of the blockchain technology in the crowdfunding system, adding substantial features as: anonymity, decentralization and transparency.
Fintech in simple terms is leveraging technology to deliver banking and financial solutions to individual and enterprise customers. This is one of the fastest-growing sectors in both developed & developing countries with India amongst the top three fintech startups globally. Blockchain, Cryptocurrency, AI, Data Analytics, Machine learning, Big data, Robotics, and Cloud are some of the top technologies leveraged by fintech firms to deliver products. Domestic & global broadband connectivity setup by telecom service providers made available basic infrastructure needed for fintech growth. One of the early fintech innovations was the installation of the first ATM by Barclays Bank in 1967. Post global financial crisis in 2008, many ex-employees of financial firms came up with innovative fintech products. The objective of this paper is to identify globally emerging fintech trends. The Qualitative research methodology was used relying on a review of literature, discussion with the professionals and researchers. The emerging trends include IMF focus on leveraging fintech for cross border payments using distributed ledger technology, Augmented reality for customer satisfaction, Digital insurance, Digital invoicing, Crowd-funding, Crowd investing, Robotics investment advisory, Future relationships between Banks and Fintech firms, Central bank regulatory role. It also came out that although there are many research papers on fintech globally, however, there is not much research work carried out on fintech in India and there is an opportunity for further research on innovation and growth of fintech in India.
R Naveenkumaran, S. Geetha, Kaushik Selvaraju, C Kishore · 5 authors
Crowdfunding is a method of online fundraising process that was initially developed for public members to make modest contributions to support the projects of creative individuals. Crowdfunding uses blockchain technology to offer smart contracts for users. This allows us to offer crowdfunding in a secure, transparent, and safe manner. The task of this work is to provide interactive forms for campaign development and financial contributions. Both campaign makers and donors may develop and support the campaigns by viewing or submitting requests for approval and fulfilling requests using this system. In addition, the donor may be able to see the progress of the funds they provide. All transactions will be recorded on the blockchain and stored as blocks. It is alluring to use smart contracts in blockchain. Without the aid of a trustworthy third party, a blockchain-based agreement must be negotiated, carried out, and enforced amongst unreliable participants. It is essential to develop executable code that runs on the blockchain. Blockchain was initially primarily used as the basis for cryptocurrencies, but in recent years, it has expanded to various industries. Blockchain is anticipated to be the most widely used technology as a green way to conduct internet transactions One application area for blockchain technology is crowdfunding websites. The biggest problem with todayâs global crowdfunding market is that campaigns are no longer under strict control, and some crowd- investment efforts have proven fake. By utilizing Ethereum smart contracts on the crowdfunding site, this work aims to allay these worries by assuring that the initiatives may be added within the designated time limit, eliminating fraud, and allowing the contracts to be fully mechanically performed.
Several blockchain-based financial technologies and cryptocurrencies have been launched for low-income people. Blockchain?s technical potential can be used to serve the needs of unbanked and underbanked populations, but there is no evidence that these needs are being met.
The modern financial technology (âFinTechâ) revolution has two features that distinguish it from previous eras of innovation: (1) Consumers have greater access to financial information and applications using smartphones on high-speed networks; and (2) businesses benefit from dramatically lower costs, improved performance, and enhanced options in data storage, computation, and application development. The once monolithic and proprietary financial services industry is being challenged under the zeitgeist of decentralization, disintermediation, and open protocols. Consequently, households in the United States are witnessing the emergence of new options for investment, credit, insurance, and payments. We illustrate how several influential FinTech trends may help address biases and constraints that hamper households in smoothing intertemporal consumption.
Canada has a stable financial system with large national banks that integrate fintech internally to improve operations, products and service. Because of the size and stability of its major banks, Canada has been criticized as lagging globally in consumer fintech adoption rates and fostering new fintech market entrants. The supervisory frameworks for non-bank fintech firms in Canada has some agency fragmentation costs, which can serve as a barrier to entry for new firms. The following report outlines the law of fintech, as it applies in Canada, including the regulatory frameworks for fintech money (e-money, virtual currency and electronic payments); fintech financings (initial coin offerings, peer to peer lending and invoice trading); and fintech financial services (smart contract investing, robo-advisors, algorithmic trading and market automation, artificial intelligence, decentralized autonomous organizations, and crypto hedge funds).
Purpose The purpose of this study hopes to encourage further research into the topic of local currencies, as well as specific research into increasing the efficiency of these systems through the use of blockchain technology. There is currently a lack of available research into the topic, which poses barriers for those who wish to study it, so the paper provides a general overview to be used as a starting point for those wishing to broaden their knowledge of local currency systems while also introducing a working implementation of a proof-of-concept for the proposed system. Design/methodology/approach A literature review of available studies on local currencies is conducted to provide an overview of the current systems and their shortcomings. Subsequently, blockchain technology is briefly introduced and an Ethereum-based model is proposed, which helps overcome the problems identified. The section exploring the Ethereum-based model draws code written by the author to simulate the features. Findings The paper concludes that blockchain technology can significantly help improve efficiency, transparency and security of local currency systems, while also helping cut costs associated with the implementation of a complementary monetary system. In the medium-term, local currency systems will most likely use a blockchain protocol as the underlying technology for the network. Originality/value Local currencies are an understudied topic by itself and the intersection between them and blockchain is a nearly non-existent research space. Thus, the paper takes a multidisciplinary approach, aiming to bridge the fields of computer science and economics to provide a foundation for further research.
Cette etude a analyse lâimpact du cout du credit sur lâacces au financement pour les PME au Burkina Faso. Lâobjectif est de comprendre les causes et les consequences du cout eleve du credit aux PME. Ainsi une analyse comparative entre les banques conventionnelles, les systemes financiers decentralises et les institutions financieres islamiques, a permis de mettre en exergue non seulement la realite du cout de credit eleve aux PME mais aussi son influence sur leur acces au financement.Le risque eleve du financement reste la principale cause de ce cout eleve de financement qui affecte negativement lâacces au credit pour les PME. En effet, ce cout figure parmi les causes de la reticence aux credits bancaires par les PME. Lâetude a toutefois releve que dâautres causes comme les garanties, les pieces exigees, les procedures dâoctroi du credit et la duree du credit, influencent plus negativement lâacces au financement des PME que le cout du credit. Il ressort egalement que la finance islamique encore a lâetat embryonnaire au Burkina Faso, avec un seul produit disponible (Mourabaha) et relativement plus couteux que le financement classique, dâou son developpement limite surtout dans le secteur des PME.Mots cles: cout du credit-risque eleve- reticence- finance islamique embryonnairecouteuxEnglish Title: Study of the impact of credit costs on access to financing for SMEs in Burkina Faso in a comparative analysis between classic finance and Islamic finance institutionsEnglish AbstractThis study analyzed the impact of the cost of credit on access to finance for SMEs in Burkina Faso. The goal is to understand the causes and consequences of the high cost of credit to SMEs. Thus, a comparative analysis between conventional banks, decentralized financial systems and Islamic financial institutions has made it possible to highlight not only the reality of the high cost of credit for SMEs but also its influence on their access to finance.The high risk of financing remains the main cause of this high cost of financing which negatively affects access to credit for SMEs. Indeed, this cost is one of the reasons for the reluctance to bank loans by SMEs. However, the study found that other causes such as collateral, required documents, credit granting procedures and credit duration have a greater negative impact on SME access to finance than the cost of credit. It also appears that Islamic finance still in embryonic form in Burkina Faso, with only one product available (Murabaha) and relatively more expensive than conventional financing, hence its limited development especially in the SME sector.Keywords: cost of credit, high risk, reluctance, Islamic finance, embryonic, expensive
In recent years, the term âblockchainâ has been sprinkled widely and the hype around it attracts billions in investments. The promises that this technology can be a solution to many of societyâs present problems have drawn attention from all sectors, including development aid. The historical recognition of potential and actual corruption resulting from development aid sparked a rise in demands for more transparency and accountability in this sector. So far, there have been reflections in different academic disciplines about the potentials of Blockchain in this area. However, little empirical investigation has been conducted to understand the technological and institutional enablers and barriers for its adoption in the development aid sector. This study aims to take initial steps towards such understanding with a focus on the potential role for Blockchain Technology in financial aid flows through an analysis of the donorsâ perspectives. Our research is based on diverse qualitative material. It relies on reports and discussion papers produced by donor organizations and on case studies of two start-ups focused on introducing Blockchain into development aid management. Besides a body of archival qualitative material, we conducted interviews with different actors in the development financing field. Based on an inductive qualitative methodology, we grouped findings into three categories of barriers and enablers: discursive, technological and institutional. Our study shows that discourses about Blockchain Technology vary a lot and there is a lack of common framing of its definition, attributes, and insufficient engagement around these concerns between different actors. Overall, the ability to increase the visibility of cash flows and a potential to reduce administration costs were perceived to be the most useful features, combined with the desire/need expressed by some donors to be at the forefront of technological developments. Lack of understanding about this technology and fear of its complexity and related security challenges were the most cited technological obstacles. Lack of institutional structures for rule making and for enabling field-level exchanges and knowledge production around Blockchain-based projects is currently the most prominent challenge to its diffusion and wider adoption.
Since their emergence, blockchain technologies have shown potential for financial inclusion and the formalization of remittances. Recently, regulators and practitioners have studied the capabilities of blockchain technologies to streamline and, potentially, replace the infrastructure underpinning cross-border payments and remittances, i.e., correspondent banking. Correspondent Banking Relationships, also called âNostro-Vostro accounts,â are continuous bilateral arrangements that enable banks to provide services in countries where they do not directly operate. After the Global Financial Crisis, this infrastructure has undergone âde-risking,â i.e., a reduction of correspondent accounts and their concentration in fewer financial institutions, with especially detrimental effects on costs and speed of retail cross-border remittances. The existing literature has mostly focused on the point of sale of remittances, often overlooking correspondent banking. This paper, in contrast, connects remittances, blockchain technologies, and correspondent banking with the growing interest of critical social science in the significance of payment infrastructures for the constitution and configuration of money, finance, and markets. By unpacking the critical case of Ripple, this paper shows that blockchain applications to remittances focus on profits, risks, costs, interoperability, âtrapped liquidity,â and âidle capitalâ in correspondent banking accounts, rather than on financial inclusion per se. In so doing, this paper contributes to critical social studies literature on the formalization of remittances, understood as the transformation of remittances into a market frontier. Blockchain applications are shown to foster, rather than resist, remittances formalization, and they are presently being incorporated into existing infrastructures, business models, and regulatory structures. Rather than representing radically alternative monetary systems, blockchain technologies are the latest iteration of technologies heralding frictionless capitalism. Lastly, this paper shows the tensions and ambiguities inherent to interoperability and formalization. Blockchain technologies are dynamic in a way that problematizes dichotomies such formal-informal and mainstream-alternative. Hence, rather than providing a quantitative assessment of the impact of blockchain technologies, this paper investigates the ambiguities and tensions in the political economy and imaginaries inscribed in the materiality and design of blockchain-enabled payment systems.
Project Stella studies the possible use of distributed ledger technology (DLT) on financial market infrastructures (FMIs). DLT solutions have the potential to improve the safety and efficiency of existing systems, as shown by research undertaken by central banks and FMIs. Yet, balancing performance and network size with the distance between nodes, as in the case of Stella phase 1, or the flexibility of cross-ledger delivery-versus-payment (DVP) using hashed timelock contracts without connection between ledgers and liquidity efficiency, as in the case of phase 2, remains a challenge. Project Stella studies the possible use of DLT for FMIs, including large-value central bank RTGS systems. Phase 1 implemented the processing logic of the standard liquidity-saving mechanisms in a DLT environment, and the analysis found that an application could meet the performance needs of an RTGS system. There is a trade-off between DLT performance and network size or distance between nodes. DLT solutions have the potential to strengthen resiliency and reliability. In phase 2, the project team proved that cross-ledger DVP could function even without any connection between individual ledgers. Hashed timelock contracts and digital signatures would be used to achieve interoperability between ledgers, while liquidity efficiency and settlement speed may be negatively affected as a result. DLT solutions have the potential to improve safety and efficiency of existing systems adopted at FMIs, yet balancing diverse system requirements demands careful analysis and consideration. As shown by increasing research and proofs-of-concept on DLT undertaken by many central banks1 and securities exchanges in major jurisdictions, there are both opportunities and challenges for further exploration.
The unique combination of social and economic factors has brought about a dynamic and rapidly-evolving blockchain ecosystem in Asia. This paper systematically reviewed the development of four fast-growing blockchain hubs in Asia, namely China, Japan, Singapore and South Korea using secondary data sources. These countries are fast-growing based on the development of its digital, technological and regulatory infrastructure, patent applications, cryptocurrency trading volume and Initial Crypto-token Offerings (ICOs) activities. The review included insights into the different regulatory approaches, the blockchain startup scenes, selected enterprise or government-backed projects, as well as the research and educational landscape. Our findings suggested that the regulators, industry players, and academic institutions were purposeful and deliberate in nurturing blockchain technology innovation. Future development would be dependent on the regulatory, technological, as well as talent capability support unique to each blockchain hub.
This paper is a review of the literature on fintech and its interaction with banking. Included in fintech are innovations in payment systems (including cryptocurrencies), credit markets (including P2P lending), and insurance, with Blockchain-assisted smart contracts playing a role. The paper provides a definition of fintech, examines some statistics and stylized facts, and then reviews the theoretical and empirical literature. The review is organized around four main research questions. The paper summarizes our knowledge on these questions and concludes with questions for future research.
This paper tends to examine cryptocurrency and its permissibility in the structure of Islamic banking finance. It identifies the major types of cryptocurrencies and also revealed its benefits. Despite these benefits and relating it to Islamic finance it was viewed from two angle; cryptocurrency and money in Islam and also cryptocurrency and the principles of Islamic finance. The study revealed it is compatible to structure of Islamic banking and finance when compared side by side to the features of fiat money which is currently in use. More so, the study clears some of the key issues like its legal tender, issuer unknown, money laundering & illicit purpose etc usually raised against cryptocurrency. The study concluded that cryptocurrency as an economic innovation has secured a pass mark to fit into the structure of Islamic banking and finance. The study further recommends that there is need to create standards guiding its operations, further ensure full disclosure on its transactions etc.
This study investigates the relationship between cryptocurrency, internet, mobile phones, financial inclusion, and financial sector development in China, India, Nigeria, and South Africa for the period 2009â2017 using fully modified ordinary least square (FM-OLS) and causality analysis. The empirical results show that cryptocurrency, internet usage, and mobile subscriptions have a significant positive relationship with financial inclusion and financial sector development, suggesting that countries with higher levels of cryptocurrency, internet usage, and mobile subscriptions have higher levels of financial inclusion and financial sector development. This finding is further buttressed by the causality analysis which shows that cryptocurrency, internet usage, and mobile subscriptions cause financial inclusion and financial sector development in the four countries.