IDEAS home Printed from
   My bibliography  Save this paper

Motivations and barriers to crowdlending as a tool for diasporic entrepreneurial finance


  • Cécile Fonrouge

    () (IRG - Institut de Recherche en Gestion - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)

  • Daniela Bolzani



The flow of money from members of diasporas and their descendants back to their homelands is significant. In fact, such investments, when made in the form of loans aimed at sustaining entrepreneurship, can contribute to the economic development of the diaspora's home country. Given the increasing relevance of crowdlending as a method of entrepreneurial finance in developing countries, what are the factors that motivate diasporans to invest through online crowdlending instead of through more traditional options, and what barriers hinder them from doing so? We present a theoretical analysis that draws on the existing literature on crowdfunding and transnational entrepreneurship combined with field interviews with three founders of online diasporic platforms. We discuss the variables that must be taken into account when explaining the motivations of diasporans and the barriers hindering their engagement in online microlending. Several areas are highlighted for future theoretical and empirical research to study this largely under-researched phenomenon.

Suggested Citation

  • Cécile Fonrouge & Daniela Bolzani, 2019. "Motivations and barriers to crowdlending as a tool for diasporic entrepreneurial finance," Post-Print halshs-02077559, HAL.
  • Handle: RePEc:hal:journl:halshs-02077559
    Note: View the original document on HAL open archive server:

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Ravi Ramamurti, 2004. "Developing countries and MNEs: extending and enriching the research agenda," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(4), pages 277-283, July.
    2. Ajay Agrawal & Christian Catalini & Avi Goldfarb, 2014. "Some Simple Economics of Crowdfunding," Innovation Policy and the Economy, University of Chicago Press, vol. 14(1), pages 63-97.
    3. Aki Harima & Maria Elo & Jörg Freiling, 2016. "Rich-to-poor diaspora ventures: how do they survive?," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 28(4), pages 391-413.
    4. Kate Gillespie & Liesl Riddle & Edward Sayre & David Sturges, 1999. "Diaspora Interest in Homeland Investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(3), pages 623-634, September.
    5. Cécile Fonrouge, 2017. "Crowdfunding Et Diasporas : Le Financement Participatif Vient-Il Remettre En Cause Les Acteurs Du Financement Diasporique ?," Post-Print hal-01555251, HAL.
    6. Cécile Fonrouge, 2017. "Crowdfunding et diasporas?: le financement participatif vient-il remettre en cause les acteurs du financement diasporique'," Innovations, De Boeck Université, vol. 0(1), pages 211-231.
    7. Daniela Bolzani & Cristina Boari, 2018. "Evaluations of export feasibility by immigrant and non-immigrant entrepreneurs in new technology-based firms," Journal of International Entrepreneurship, Springer, vol. 16(2), pages 176-209, June.
    8. Chung, Henry F.L. & Tung, Rosalie L., 2013. "Immigrant social networks and foreign entry: Australia and New Zealand firms in the European Union and Greater China," International Business Review, Elsevier, vol. 22(1), pages 18-31.
    9. Riddle, Liesl & Hrivnak, George A. & Nielsen, Tjai M., 2010. "Transnational diaspora entrepreneurship in emerging markets: Bridging institutional divides," Journal of International Management, Elsevier, vol. 16(4), pages 398-411, December.
    10. Raymond Fisman & Daniel Paravisini & Vikrant Vig, 2017. "Cultural Proximity and Loan Outcomes," American Economic Review, American Economic Association, vol. 107(2), pages 457-492, February.
    11. Ajay Agrawal & Christian Catalini & Avi Goldfarb, 2015. "Crowdfunding: Geography, Social Networks, and the Timing of Investment Decisions," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 24(2), pages 253-274, June.
    12. Paul Belleflamme & Thomas Lambert & Armin Schwienbacher, 2013. "Individual crowdfunding practices," Venture Capital, Taylor & Francis Journals, vol. 15(4), pages 313-333, October.
    13. Mingfeng Lin & Siva Viswanathan, 2016. "Home Bias in Online Investments: An Empirical Study of an Online Crowdfunding Market," Management Science, INFORMS, vol. 62(5), pages 1393-1414, May.
    14. Muzychenko, Olga, 2008. "Cross-cultural entrepreneurial competence in identifying international business opportunities," European Management Journal, Elsevier, vol. 26(6), pages 366-377, December.
    15. Riddle, Liesl & Brinkerhoff, Jennifer, 2011. "Diaspora entrepreneurs as institutional change agents: The case of," International Business Review, Elsevier, vol. 20(6), pages 670-680.
    16. Masaaki Kotabe & Liesl Riddle & Petra Sonderegger & Florian Taübe, 2013. "Diaspora Investment and Entrepreneurship: The Role of People, their Movements, and Capital in the International Economy," ULB Institutional Repository 2013/206785, ULB -- Universite Libre de Bruxelles.
    17. David Bounie & Dana Diminescu & Abel François, 2013. "On the Effect of Mobile Phone on Migrant Remittances: A Closer Look at International Transfers," Post-Print hal-02286506, HAL.
    18. Paul L. Freedman & Reid W. Click, 2006. "Banks That Don't Lend? Unlocking Credit to Spur Growth in Developing Countries," Development Policy Review, Overseas Development Institute, vol. 24(3), pages 279-302, May.
    19. Mollick, Ethan, 2014. "The dynamics of crowdfunding: An exploratory study," Journal of Business Venturing, Elsevier, vol. 29(1), pages 1-16.
    20. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 797-817.
    21. Dorfleitner, Gregor & Oswald, Eva-Maria, 2016. "Repayment behavior in peer-to-peer microfinancing: Empirical evidence from Kiva," Review of Financial Economics, Elsevier, vol. 30(C), pages 45-59.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rana, Mohammad B. & Elo, Maria, 2017. "Transnational Diaspora and Civil Society Actors Driving MNE Internationalisation: The Case of Grameenphone in Bangladesh," Journal of International Management, Elsevier, vol. 23(1), pages 87-106.
    2. Maria Elo, 2016. "Typology of diaspora entrepreneurship: Case studies in Uzbekistan," Journal of International Entrepreneurship, Springer, vol. 14(1), pages 121-155, March.
    3. Maria Elo, 2015. "Diaspora networks in international business: a review on an emerging stream of research," Chapters, in: Handbook on International Alliance and Network Research, chapter 1, pages 13-41, Edward Elgar Publishing.
    4. Renwick, Matthew J. & Mossialos, Elias, 2017. "Crowdfunding our health: Economic risks and benefits," Social Science & Medicine, Elsevier, vol. 191(C), pages 48-56.
    5. Laurell, Christofer & Sandström, Christian & Suseno, Yuliani, 2019. "Assessing the interplay between crowdfunding and sustainability in social media," Technological Forecasting and Social Change, Elsevier, vol. 141(C), pages 117-127.
    6. Tanja Jovanović, 2019. "Crowdfunding: What Do We Know So Far?," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 16(01), pages 1-25, February.
    7. Kuti, Mónika & Galambosné Tiszberger, Mónika & Czigler, Enikő, 2018. "Magyarországról indított közösségi finanszírozású kampányok. A Kickstarter-platform esete [Kick-starter campaigns launched from Hungary]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 206-225.
    8. Martin Walther & Marco Bade, 2020. "Observational learning and willingness to pay in equity crowdfunding," Business Research, Springer;German Academic Association for Business Research, vol. 13(2), pages 639-661, July.
    9. Giancarlo Giudici & Massimiliano Guerini & Cristina Rossi-Lamastra, 2018. "Reward-based crowdfunding of entrepreneurial projects: the effect of local altruism and localized social capital on proponents’ success," Small Business Economics, Springer, vol. 50(2), pages 307-324, February.
    10. Michael E. Cummings & Alan Gamlen, 2019. "Diaspora engagement institutions and venture investment activity in developing countries," Journal of International Business Policy, Palgrave Macmillan, vol. 2(4), pages 289-313, December.
    11. Appio, Francesco Paolo & Leone, Daniele & Platania, Federico & Schiavone, Francesco, 2020. "Why are rewards not delivered on time in rewards-based crowdfunding campaigns? An empirical exploration," Technological Forecasting and Social Change, Elsevier, vol. 157(C).
    12. Chan, C.S. Richard & Parhankangas, Annaleena & Sahaym, Arvin & Oo, Pyayt, 2020. "Bellwether and the herd? Unpacking the u-shaped relationship between prior funding and subsequent contributions in reward-based crowdfunding," Journal of Business Venturing, Elsevier, vol. 35(2).
    13. Nyame-Asiamah, Frank & Amoako, Isaac Oduro & Amankwah-Amoah, Joseph & Debrah, Yaw A., 2020. "Diaspora entrepreneurs’ push and pull institutional factors for investing in Africa: Insights from African returnees from the United Kingdom," Technological Forecasting and Social Change, Elsevier, vol. 152(C).
    14. Johannes Wallmeroth & Peter Wirtz & Alexander Groh, 2017. "Institutional Seed Financing, Angel Financing, and Crowdfunding of Entrepreneurial Ventures: A Literature Review," Working Papers hal-01527999, HAL.
    15. Nerys Fuller-Love & Mofoluke Akiode, 2020. "Transnational Entrepreneurs Dynamics in Entrepreneurial Ecosystems: A Critical Review," The Journal of Entrepreneurship, Entrepreneurship Development Institute of India, vol. 6(1), pages 41-66, January.
    16. Thomas Clauss & Thomas Niemand & Sascha Kraus & Patrick Schnetzer & Alexander Brem, 2019. "Increasing Crowdfunding Success Through Social Media: The Importance Of Reach And Utilisation In Reward-Based Crowdfunding," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 24(03), pages 1-30, May.
    17. Zaggl, Michael A. & Block, Joern, 2019. "Do small funding amounts lead to reverse herding? A field experiment in reward-based crowdfunding," Journal of Business Venturing Insights, Elsevier, vol. 12(C).
    18. Yan Lin & Wai Fong Boh, 2020. "How different Are crowdfunders? Examining archetypes of crowdfunders," Journal of the Association for Information Science & Technology, Association for Information Science & Technology, vol. 71(11), pages 1357-1370, November.
    19. Bi, Gongbing & Geng, Botao & Liu, Lindong, 2019. "On the fixed and flexible funding mechanisms in reward-based crowdfunding," European Journal of Operational Research, Elsevier, vol. 279(1), pages 168-183.
    20. Friedemann Polzin & Helen Toxopeus & Erik Stam, 2018. "The wisdom of the crowd in funding: information heterogeneity and social networks of crowdfunders," Small Business Economics, Springer, vol. 50(2), pages 251-273, February.

    More about this item


    developing countries; diasporic finance; transnational; diaspora; diasporan; diasporic investment; migration; entrepreneurship; microlending; entrepreneurial finance; crowdfunding; crowdlending;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:halshs-02077559. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.