Crowdfunding platforms and financial inclusion: Fulfilled promise or disillusion?

• Crowdfunding expands access to capital to more borrowers. • More vulnerable borrowers, however, remain underserved. • We do not see an improvement in interest rates. • Our results show that, while digital technologies support organizations in developing countries, other measures should be considered. Pro-social crowdfunding platforms offer a promising path for financial inclusion in developing countries. The literature on crowdfunding lacks evidence of whether and to what extent pro-social crowdfunding platforms fulfil this promise. Employing different techniques to tackle endogeneity, we show that, while crowdfunding platforms expand access to capital to more borrowers, the service to more vulnerable individuals does not improve. We also find that interest rates remain unchanged. Our results allow us to provide recommendations to policymakers regarding the connection between digital technologies like crowdfunding platforms and financial inclusion.