Social Finance and Crowdfunding

On: September 30, 2009
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About Han Rusman
I'm a MA student and also a freelance consultant and designer in e-commerce. I've started my own company about 5 years ago. Social links;


Participatory web projects offer a broad spectrum of opportunities. Banking 2.0 is “a way for people to lend and borrow directly with each other online[…]”. You can own a small piece of a footballclub at “You are invited to join members from over 80 countries who own Ebbsfleet United and vote on all key decisions from team selection to financial budgets. Membership costs £35 annually.”. Obama raised an enormous amount of money online and at you can invest in a band.

For me, the most interesting form of crowdfunding is the microloan-service of The website of is filled with entrepreneurs from all around the globe (especially the poorest country’s) in need of a small amount of money to start a business. For instance I can loan 25 dollars to a fishing group in Uganda. Together with another 55 other loaners there is 4000 dollars raised, which is enough to buy nets, boats and rods. The fisherman’s will pay our loan back in 5 terms. The last term ends at 1 March 2010. In March I can decide to re-lend or withdraw the funds.

Micro financing is not really new, but the web can add a social dimension. To own a footballclub might not be really profitable, but it’s definitely fun to be part of the footballclub. Owners make movies on their mobile phones of ‘talents’ in Brazil, and arrange carpools for the matches. It’s at least interesting to see if this kind of democratic decision-making will actually work.

There are a lot of similarities between the Obama campaign and crowdfundingprojects like Kiva. The Obama campaign was centralized around the slogan “it’s about you”. The crowdfunding-trend seems to be a countertrend against the feeling that people are tiny dots in the huge universe. You can actually do something seems to be the promise of these new organizations. Microfinance is really promising (although it can’t completely solve poverty) like Jonathan Murdoch researched in The Economics of Microfinance, 2005.

How can social networking help these organizations grow, like it did in the Obama campaign? And more important what impact will The social part of the campaign of Obama was an important factor. On his own social network,, status was gained by the amount of money you raised. It might be an old trick, but it was one of the few ways to get status in this network. Obama even extended the network by using all the networks his target-group used. Fundraising became a social activity, with ‘attention’ and ‘status’ as a reward.

What are the implications of social finance on society? What is the social of social finance? (Is it especially linked to status and identity or is it more?

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