ABSTRACT
Microfinance has often recurred to other financial innovations and new technologies with the objective of reducing costs, expanding the potential reach of clients as well as of financers and responding to clients' needs. This chapter focuses on two types of financial innovations often deployed by microfinance institutions (MFIs), crowdfunding and mobile banking. M-banking might however make less easily understandable microfinance pricing, adding new fees and costs. When m-banking is offered directly by banks, not many legal issues arise. Crowdfunding allows users of an internet platform to provide financing to firms or consumers in the form of donations, advancements in exchange for some future non-financial reward, loans or investments. The most-widespread peer-to-peer lending (P2P) lending model involves the direct provision of loans by internet users to consumers or firms, with significant information asymmetries and risk of fraud, and a commission fee for the platform.
