Crowdfunding as Financial Intermediation: A Critical Review of Its Promises, Limitations, and Economic Impact
DOI:
https://doi.org/10.65820/ejems-4vol2-issue2-2026Keywords:
Crowdfunding, Financial Intermediation, Economic Development, Alternative Finance, Fintech, Financial InclusionAbstract
Purpose: This study critically examines whether crowdfunding constitutes a genuine form of financial intermediation, contributes meaningfully to economic development, and can be regarded as a credible institutional alternative to traditional financial systems.
Methods: The study adopts a structured narrative literature review, synthesising existing theoretical and empirical research across five key themes: crowdfunding as financial intermediation, developmental outcomes, comparisons with traditional financial institutions, structural and scalability limitations, and regulatory, technological, and trust-related constraints.
Results: The findings reveal a persistent gap between the rhetoric of disruption and empirical realities, showing that crowdfunding’s impact remains modest, geographically uneven, and sector-specific. While it provides valuable support for early-stage ventures, creative industries, and financially excluded groups, its capacity to generate transformative macroeconomic effects is limited.
Novelty and Contribution: This study contributes a theoretically grounded and critically balanced synthesis that moves beyond both promotional and dismissive narratives. It reframes crowdfunding as a complementary financial mechanism within pluralist financial ecosystems, rather than a disruptive substitute for traditional financial intermediation.
Social and Practical Implications: The findings underscore the need for policy and regulatory approaches that recognise crowdfunding’s complementary role while addressing its structural limitations. The study also highlights the importance of rigorous, longitudinal, and cross-national research to better understand its long-term economic and distributional effects.
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Copyright (c) 2026 Azeez Oshoba, Kudirat Oluwatoyin Mueeb (Author)
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This article is licensed under a Creative Commons Attribution 4.0 International License.
