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> Posted by Danielle Piskadlo and Jeffrey Riecke, Senior Program Specialist and Communications Assistant, CFI

The Investing in Inclusive Finance program at the Center for Financial Inclusion at Accion explores the practices of investors in inclusive finance. Across areas including risk, governance, stakeholder alignment, and fund management, this blog series highlights what’s being done to help the industry better utilize private capital to develop financial institutions that incorporate social aims.

Thanks to social media, we are in a new era of sharing. Everything from major life events to fleeting thoughts like “I’m hungry” get posted, tweeted, and shared within social circles these days. And the provision of financial service – once a private affair – is not immune.

Sites such as Prosper and Kickstarter are among the many new crowdsourcing websites that allow people to share – in fact, advertise – their status of “I need a loan.” And these sites are revolutionizing what it means to be an entrepreneur or artist today by smashing the barriers to entry for funding a new idea, skill, or product.

In a big way, the days of trying to explain the market potential of your business plan for a trendy new app to a banker are disappearing as are the days of playing your music in the subway or selling your art on the sidewalk, hoping to get discovered. Now, almost anyone with a product or craft can simply post it on one of many sites to crowdsource the funding.

One of the beauties of crowdsourced financing is that it allows an entrepreneur or artist to assess market demand. The crowd tells you if your idea or art has potential by funding it. And distributed funding requests allow entrepreneurs or artist to tap into social networks for support in a meaningful way and without any real risk.

There are many crowdsourced financing platforms out there, and lots of different business models, so let’s take a closer look at one of the more prominent outfits: Kickstarter. Since the service began in mid-2010, more than 4.9 million people have backed a Kickstarter project, pledging over $800 million across 49,000 projects.

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