Will Crowdfunding Become a Big Deal in India?
Crowdfunding — the practice of raising small amounts of capital from a large number of people to fund new ventures — is finally gaining traction in India. The question is: Will it deliver like it has in other markets?
India has just overtaken the U.S. to become the No. 1 country for Facebook users: It has an audience of more than 241 million active users compared to 240 million in the U.S. The Facebook metric matters because in crowdfunding, “the single most predictive factor for the rate of emergence is social media penetration,” notes a World Bank report titled, “Crowdfunding’s Potential for the Developing World.”
A few years back, India also became the second-largest mobile phone subscriber base after China. That also matters because, in India, social media is predominantly mobile. According to a report titled, “Mobile Internet in India 2016,” there were 389 million mobile internet users in the country. The World Bank report observes that “crowdfunding has emerged as a multibillion-dollar global industry.” But a “constellation of trust,” incubated by social media, is necessary to promote its growth in developing nations.
Photo courtesy of Véronique Debord-Lazaro.