Reducing Poverty Through Micro-Financing: How Relevant Is Crowdfunding Model

Poverty has emerged as a major issue in our society, due to low living standards and citizens' incapacity to meet their fundamental necessities, micro financing through crowd funding have enhanced economic development and reduced effort to lessen the world's declining standard of living. The study aimed to investigate the impact of microfinance banks that employ a crowdfunding model on poverty reduction, seeking to address the limitations of traditional microfinance approaches. This study used a comprehensive desk review procedure based on three key pillars to assess available scholarly and documentary data. It began with a conceptual assessment that defined key terms like poverty, financial inclusion, and the crowdfunding model in order to develop a cohesive framework. A theoretical review focused on financial inclusion theory and the crowdfunding model in order to understand the theoretical relationship between crowdfunding and poverty reduction. Finally, an Empirical Review synthesized a wide range of data from numerous global contexts to assess the known effects, limitations, and unintended consequences of both crowdfunding and microfinance on poverty indicators. Based on a thorough investigation of the literature, actual data, and theoretical perspectives, the study's findings demonstrate that the relationship between crowdfunding and poverty reduction is intricate and subtle, with clear potential tempered by significant constraints. Numerous significant issues of agreement and disagreement are highlighted in the conversation. According to the study's findings, crowdsourcing has real but limited potential to reduce poverty. The study suggested that in order to provide a secure location for savings and a dependable source of funding for launching or growing firms, policymakers should promote policies that encourage broader involvement, particularly among those excluded from traditional banking.