– The purpose of this paper is to discuss how regulatory environment can be a fundamental constraint or lever in defining the scope of operations of a social innovation.
The purpose of this paper is to discuss how regulatory environment can be a fundamental constraint or lever in defining the scope of operations of a social innovation.
Semi-structured interviews with top-level executives of pioneers of crowdfunding were run in India and France, two of the three leading countries in this field.
Four main issues rise: choice of legal status, constraints for the operations model, compliance with anti-money laundering measures and challenges in marketing and sustainability.
This paper contributes to knowledge advancement in the field of this new funding actor that could challenge the banking system. This is the first paper to explore these regulatory issues and their impact on marketing practices.
Purpose – The purpose of this chapter is to challenge the common idea that microfinance, which is part of alternative finance, was created by Professor Muhammad Yunus, Nobel Peace Prize laureate in 2006. This chapter aims to outline past initiatives which can be compared to contemporary microcredit practice.
Methodology/Approach – In this chapter we look at historical aspects of finance and all kinds of alternative finance in order to demonstrate that microcredit existed in an archaic form long before Professor Yunus's theorization.
Findings – We find that microcredit has barely always existed in different forms, but has benefited from technic innovations to get a wider outreach.
Originality/Value of chapter – These findings are novel since nobody evoked this clearly before.
Since the recent global financial crisis began in 2008–2009, there has been strong decline in financial markets and investment, huge losses and bankruptcies that have led to a major financial downturn, and a significant economic recession for most developed and emerging economies. Some economists and financial analysts now consider this crisis to be more harmful in some ways than the Great Depression of 1929. Those economists and analysts point to a number of technical issues and limitations associated with the present financial systems, monetary institution rules, accounting and rating formulas, and investment strategies and choices. To try to overcome the financial downturn and, at the same time, to protect the banking systems and financial markets and to reassure investors, central banks have attempted various solutions, governments have introduced new plans (e.g., the Paulson plan), policymakers have included these topic in their political programs, and several conferences and political summits have been organized to discuss the issues. There have been two prevailing lines of thought. According to one line of thought, the extreme risk associated with speculation in sophisticated financial products, the nature of the credit-banking economic system, the gap between real and financial economies, and the strategic errors of monetary institutions constitute the main sources of the financial crisis.1 On the other hand, it is now argued that this trend needs to be altered. According to that view, monetary institutions, banking and trading systems, rating agencies, and asset pricing modeling need to be reassessed (Barnett, 2012).
This chapter attempts to offer a clearer look at the historical roots of the founding of mutualist finance. Without denying that the various forms of financial mutualism may have legal and organizational roots in ancient times, the author considers what, for contemporary mutualist banks, may constitute the soul.
In its first part, the document presents the individual constructions that existed in the eighteenth and nineteenth centuries, in a context in which economic development and the industrial revolution banished the rules and standards of the former society. It refers to Utopian socialisms as opposed to the scientific solutions proposed for a new social organization and to the new solidarism according to Léon Bourgeois. Christian sources are also called to mind with social Christianity (Protestant) and social Catholicism until the birth of the social doctrine of the Church.
This frenzy of ideas as well as the confrontation with reality led to the birth, in Germany, of the first experiments with alternative finance. This is the subject of the second part of this chapter, which then develops the bank mutualism created by the founding fathers, F.W. Raiffeisen and H. Schulze-Delitzsch.
The historical description of the creation of mutualist banks brings up two major problems when talking about the “other finance”: the interest and activity of the bank. Is an ethical finance capable of proposing a credible alternative? This is a question that needs to be answered in the light of history.
This chapter attempts, more than 150 years after the fact, to demonstrate the ponderous presence of the question and the permanence of the founding ideas in order to comprehend the facts and propose ideas for analysis and construction of an “other finance.”