JEL Classification: E 51, G 20
Volosovych Svitlana, Doctor of Economics (E.D.), Professor, Professor of the Department of Finance, Kyiv national university of trade and economic, Kyiv, Ukraine
Vasylenko Antonina, Candidate of Economics (PhD), associate professor of the Department of Finance, Kyiv national university of trade and economic, Kyiv, Ukraine
CROWDFUNDING AS AN INNOVATIVE METHOD FOR FINANCING PROJECTS
Introduction. Transformation of investment project financing methods has led to the creation of a crowdfunding, which allows a large number of people through an online platform jointly fund certain types of projects of different purposes.
Purpose. The purpose of the paper is to determine the possibilities of crowdfunding development in the context of the financial market institutional transformations.
Results. Crowdfunding is an instrument of financing projects through an open call on the basis of material or moral interest of potential sponsors. The principles of crowdfunding are the target nature of contributions, the interest of future sponsors, the transparency of the attraction and use of attracted financial resources, and the convenience for investors. The maturity level of crowdfunding as a component of the alternative finance system can be assessed by such criteria as the degree of information provision, degree of activity, diversity in platform types, approach of banking industry towards platforms, the level of public awareness, the level of government regulation. It has been assumed that in Europe and the USA implementation of legislation on crowdfunding is held. Domestic legislative base does not contain specific norms regulating these activities.
Conclusions. Regarding shortage of financial resources, despite the risk of project initiators bankruptcy, crowdfunding is promising for funding small and medium enterprises. This requires the creation of appropriate legislation. At the same time, activating the processes of decentralization in the domestic financial system, crowdfunding can become promising for use by local authorities in financing certain projects.
Keywords: crowdfunding, principles of crowdfunding, crowdfunding business models’ types, state regulation of crowdfunding.
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