Alternative Financing Research Articles

Alternative Financing for a Sustainable Energy Transition: An Institutionalist Perspective

This article adopts an institutionalist perspective in order to address the energy transition process and to consider, in particular, the alternative financing mechanisms that would be able to support a structural transformation that is sustainable in the long term. It argues that such a transformation can be regarded in a holistic and broader way as an eco-transition process that involves the whole society and economy and requires a societal public organization. A relevant holistic approach to eco-transition should focus on the institutional conditions that are required for a new sustainable and structural change framework. In this aim, the article points to the features of the transition process that display the characteristics of a public good. The durable provision of such a good calls for the transformation of the financing schemes in force to support green investments beyond the usual opposition between market-friendly and government-guided economic policies. A relevant avenue is to organize the financing of the eco-transition under the supervision of public institutions even though the contribution of private bodies might be valuable according to the rules of long-term non-speculative financial support of markets.

Social and demographic determinants of health insurance status in India: Evidence from a nationally representative cross-sectional survey.

Out-of-pocket medical expenses are a crucial metric for assessing how well the healthcare system is working toward obtaining universal health coverage in any country. In India, out-of-pocket expenses for health are relatively high compared to other developed countries due to a lack of alternative finance arrangements. The disparity in out-of-pocket medical expenses largely depends upon the public health expenditure, government policies, and level of health insurance coverage. The study used a logit regression model to examine the association of the status of health insurance with socio and demographic variables using National Sample Survey 2018 data. The objective of the study is to analyze the impact of demographic variables on the status of health insurance in India. This research found that education and occupation have a significant impact on the status of health insurance, among other demographic factors. These findings underscore the importance of targeted policies and interventions aimed at improving access to health insurance among specific demographic groups. Addressing disparities in health insurance coverage based on educational and occupational factors is essential for achieving equitable healthcare access and improved health outcomes in the country. Increasing awareness of health insurance reduces out-of-pocket medical expenses and subsequently brings down economic poverty.

COMPARATIVE ANALYSIS OF FUNDING OF UNIVERSITY EDUCATION IN EU COUNTRIES

This paper conducts a comparative analysis of the funding models for university education in the European Union (EU), focusing on government, private, and alternative funding sources. Purpose of the study is to analyze and compare the different funding models for university education in the EU and evaluate their efficacy. The basis of the study was the scientific works of researchers from different countries of the world and the OECD report, which presents the features of public, private and alternative financing of higher education. The main methods used in the article are methods of analysis and synthesis, comparative analysis and generalization. The analysis examines how these funding models impact accessibility, quality, and sustainability of higher education across different EU member states, including Germany, Sweden, the United Kingdom (pre-Brexit), and Italy. Through a review of existing literature and an evaluation of different funding mechanisms, the study identifies key trends and outcomes associated with each funding type. The paper also explores how European integration and policies influence these funding mechanisms. By comparing models across various countries, this analysis aims to highlight best practices and recommend policy enhancements to harmonize educational opportunities and meet future economic and social demands. The study recommends that EU countries consider a balanced approach to funding that combines the strengths of government support, private investment, and innovative funding mechanisms. This approach should aim to ensure equitable access to high-quality education while fostering financial sustainability and adaptability to changing economic conditions. Further, the paper suggests that ongoing evaluation and adaptation of funding models are essential to address the evolving needs of students and the broader socio-economic landscape. These findings and recommendations contribute to a deeper understanding of the complexities and dynamics of funding university education in the EU, providing a foundation for policymakers to enhance the effectiveness and fairness of higher education systems across Europe.

Tourists' willingness to fund local investments in renewable energy: A contingent valuation study from the Galápagos Islands

Renewable energy technologies may have positive socioeconomic and environmental consequences at the local, regional, and global levels. However, transitioning to renewable energy sources requires substantial capital investments, which calls for alternative funding mechanisms, particularly in developing areas. In this study, we used the contingent valuation method to assess the economic feasibility of voluntary contributions from tourists to fund renewable energy projects in the Galápagos Islands, a renowned tourist destination. Of the 336 tourists who completed our survey, 42.3 % were willing to donate. Estimation results based on logit models indicate that the likelihood of giving is inversely related to the donation amount and positively related to the perceived consequentiality of our study and the tourists' familiarity with renewable energy. Conservative estimates indicate that the median tourist would make a one-time donation of US$ 85 to finance the transition to renewable energy. We conclude that voluntary donations from tourists can accelerate the transition to renewable energy and thus help the Galápagos Islands reach their goal of decarbonizing the islands by 2030.

BBC Funding: Much Ado about the Cost of a Coffee a Week

AbstractBBC funding (the licence fee model and the funding level) has been turned into a big issue out of all proportion to the low financial stakes—equivalent to the cost of one takeaway coffee a week for the whole household, excluding those with free TV licences. This article first proposes and explores three possible reasons for all the fuss: that licence payers take the BBC for granted, underestimating the value they get from it; that the attacks on BBC funding are part of a wider ‘war’ against it, driven by commercial or political vested interests; and that at least some of the criticisms of the licence fee reflect genuine, although much exaggerated, disadvantages. The article then evaluates four alternative funding models: advertising, subscriptions, general taxation and a universal household levy. It argues that the best long‐term model would be a flat, universal household levy, with exemptions for those least able to pay, as in Germany, with the funding level set by an independent body organised by Ofcom; and that, because the licence fee is becoming harder to sustain, this new funding model should be introduced at the start of the next BBC Charter in January 2028.

CROSS BORDER MERGERS & ACQUISITIONS ALONG WITH REGULATIONS OF OVERSEAS INVESTMENT AND SEBI

Cross-border mergers and overseas investments by “Alternative Investment Funds” (AIFs) and “Venture Capital Funds” (VCFs) are two significant mechanisms facilitating capital movement across borders in the globalized economy. This paper provides an in-depth analysis of the regulatory frameworks and operational dynamics of both mechanisms, comparing and contrasting their objectives, entities involved, regulatory requirements, and risk-reward profiles. Cross-border mergers involve the consolidation of companies from different jurisdictions, aiming to achieve synergies, expand market presence, or leverage complementary strengths. The regulatory landscape governing cross-border mergers includes provisions under the Companies Act, of 2013, “The Foreign Exchange Management Act” (FEMA), and Competition Act, of 2002, among others. These mergers entail adherence to complex legal and regulatory frameworks, including approvals from regulatory authorities, compliance with foreign exchange laws, and fulfilment of competition norms. Despite the potential benefits, cross-border mergers also pose integration challenges, cultural differences, and regulatory uncertainties. In contrast, overseas investments by AIFs/VCFs enable domestic investors to diversify their portfolios by accessing opportunities in offshore companies, typically startups or emerging enterprises. The regulatory framework for these investments is overseen by the “Securities and Exchange Board of India” (SEBI) and includes guidelines, circulars, and compliance requirements. While regulatory compliance is necessary, the process may be relatively streamlined compared to cross-border mergers. Furthermore, the paper discusses the distinct objectives, entities involved, and risk-reward profiles of cross-border mergers and overseas investments by AIFs/VCFs. Cross-border mergers primarily involve established companies seeking strategic alliances or expansion opportunities, while AIFs/VCFs focus on deploying capital into high-growth opportunities, often at early stages of development. Overall, understanding the nuances of both mechanisms is crucial for businesses, investors, and policymakers to navigate the complexities of the globalized economy and make informed decisions regarding cross-border transactions.

Contributions of Startups to the Growth of the Indian Economy: A State Wise Analysis

The paper investigates the complex effects of startups on the resilience and growth trajectory of the Indian economy. It explores the ways in which these young, creative businesses are promoting dynamism and adaptation, especially in the face of economic difficulties. The report clarifies government programs that give emerging businesses critical financial support, such as the Startup India Seed Fund Scheme (SISFS) and Alternative Investment Funds (AIFs) under the Fund of Funds for Startups (FFS). The article intends to reveal the role of startups in driving inclusive economic growth, fostering technological advancements, and creating jobs by analyzing their individual contributions across different sectors. The study also looks into how entrepreneurs are promoting India as an innovation hub and raising the country’s global competitiveness. Policymakers, investors, and entrepreneurs will all benefit from this investigation’s insightful findings, which emphasize how important it is to support a strong startup ecosystem in order to have a vibrant Indian economy.

CHALLENGES IN THE IMPLEMENTATION OF MUDHARABAH FINANCING IN THE ISLAMIC BANKING INDUSTRY

In recent decades, the proliferation of Islamic banking has rendered it a significant entity in the global financial arena, captivating numerous entrepreneurs and businesses with its ethically distinctive financing alternatives. Several Islamic financial institutions adhere robustly to the profit-sharing principle, notably via mudharabah, in product financing. This research paper explains why mudharabah contracts are used in Islamic banking products, focusing on financing schemes, literacy, and the lack of equal access to information. Moreover, within the context of Islamic FinTech, this research highlights high business risk as a pronounced impediment to the efficacious implementation of mudharabah. In addition, this study offers a rigorous analysis of the issues and challenges endemic to mudharabah financing, venturing into perspectives from regulators and Islamic bank customers. This paper utilized a literature review methodology, and data extracted from relevant literature is systematically analyzed to evaluate mudharabah products as a viable business financing model. Conclusively, the insights derived from this research are positioned to formulate strategic recommendations, fostering advancements in implementing mudharabah contracts within Islamic product financing.

Critical Success Factors for the Implementation of Public-Private Partnerships in Zimbabwe's State Universities

A weakness of the extant Public-Private Partnerships (PPPs) literature to date has been its normative approach to the subject, creating in effect, a 'one size fits all view' of the preconditions or Critical Success Factors (CSFs) for the implementation of PPPs yet they vary with the context and sector. This study challenges the existing prominent CSFs model for the implementation of PPP which it perceives to be broader and biased towards economic infrastructure in rich industrial nations and excludes the realities of post-colonial third world countries. The research developed a refined sector-specific Educational Infrastructure Critical Success Factor Model (EICSFM) that will inform effective implementation of educational infrastructure PPPs in Zimbabwe state universities. Validated suggestions from research participants were compared to the existing model used to guide this study and results showed that some of the suggested CSFs for PPPs in Zimbabwe state universities tallies with this extant widely accepted CSFs model for PPPs, whereas some differ. The new suggested emerging sector-specific CSFs for effective implementation of PPPs in state universities include; the need for state universities to have absolute autonomy, the establishment of institutional PPP Committees, state universities to be creative and aggressive, vibrant leadership at state universities, universities to have good business orientation, the establishment of innovative PPPs models for educational infrastructure projects (social infrastructure projects), the creation of project bankability and attractiveness to investors, the need for political will and creation of trust. Comparing such suggestions to the extant CSFs model, the study concluded that even though some these preconditions for successful implementation of PPPs may be similar to some of the existing ones, their application is not similar but context-based. The study thus recommends governments avoid a ‘one size fits all’ perception and approach, but rather encompass sector-specific considerations when adopting and implementing PPPs as an alternative funding option for infrastructure development.

Modern banking development during natural disasters: Evidence from the early 20th century China

How do commercial banks react to natural disasters? Using data for 375 droughts in 262 prefectures in China during 1906–1927, we find that drought-affected prefectures have more private bank inceptions than unaffected ones. The results remain robust to socioeconomic characteristics, foreign market exposure, and conditions of neighboring prefectures. This effect is driven by the prefectures with more agriculture-dependent enterprises, suggesting that banks meet local financial demand. On the other hand, new banks would enter less when the prefecture has more incumbent banks connected to drought-free areas. We argue that capital size and the network of capital reallocation are two advantages of banks coping with natural disasters over alternative financing vehicles such as pawn shops and foreign banks. In addition, the effect is greater among the prefectures practicing common law and with greater social capital, consistent with existing studies that bank credit supply depends on creditor rights protection. Finally, we show that drought-affected regions with more private bank inceptions have better development in agricultural businesses and social stability.

PROBLEMS OF MEDIA FINANCING DURING WAR AND WAYS TO SOLVE THEM

The article is devoted to the issue of financing the media industry during crises and wars. The main difficulties faced by the Ukrainian mass media after the beginning of the full-scale invasion of the Russian Federation into the territory of Ukraine are studied. Analyzing the financial instruments used for the survival and development of the media. We all understand that the media is not only a source of information space, but also one of the sectors of the state’s economy. Therefore, as we turn the page of the second year of the full-scale invasion of Ukraine by the Russian Federation, we cannot but address the question: “What financial difficulties did our media face during the war, how did they overcome them, and what are the possible sources of funding now?” That is, to look into the eternal question “Where to get money?” and how can media enterprises survive in times of crisis? Unfortunately, the problem of media funding during the full-scale invasion of Ukraine by the Russian Federation has not yet been sufficiently addressed in scientific research. However, due to the extreme relevance of this problem, it was primarily addressed by journalists themselves, raising it at journalistic forums and in their materials. The purpose of the article is to outline the problem of media financing during the war and the ways to solve it that are used by Ukrainian media in everyday life. To achieve this goal, it is necessary to consider changes in grant support for the media, analyze support from volunteer “donors”, consider the possibility of contracts with local authorities for coverage as a source of funding, consider potential opportunities for paying for content, analyze state support for Ukrainian media, and more. Thus, the loss of 90% of the advertising market at the beginning of the invasion, the departure of some journalists abroad, the inability to fulfill their financial obligations, the loss of offices and many other disappointments did not stop active, dedicated professionals in their desire to create! And tools, especially those such as finance, are always available when you have a great desire and a dream. Since Ukrainian journalism has been addressing the issue of alternative financing for two years, the field for further research is almost unlimited, and many economic experts are just now beginning to delve into this issue.

Distributing Zakatu Kasbil 'Amal as an Alternative to Student Funding, Evidence in Indonesia’s Universities

Background The purpose of this paper is to clarify the use of zakat as an alternative funding for students to pay their tuition fees. Apart from that, this paper also explains how zakat collected from muzakki fixed income known as zakatu kasbil 'amal, which is known as income zakat and is still controversial in Indonesia. Method The study uses a systematic literature review with an inductive approach to find out the theoretical basis of the research questions. The analysis uses a qualitative method that explores significant findings from various literature sources. The findings will combine with the exploration results of several universities in Indonesia that use social funds as a tool for helping students. Result The income zakat controversy mediates using the precautionary principle, which ensures that the projected income indeed exceeds the nisab (1 year) of the income. Some Islamic universities in Indonesia carry out this zakat withdrawal and even use an auto debit system. On the other hand, the distribution of zakat to students is also controversial because zakat is part of worship whose distribution is regulated into nine asnaf. Nevertheless, students may be equated with one of the asnaf so that it becomes permissible to be the subject of zakat distribution. Observation findings at Indonesian Islamic universities even show that the results of zakat distribution strongly influence the success of students’ studies, even if only in aid of tuition fees.

Alternative finance in bank-firm relationship: how does board structure affect the cost of debt?

AbstractIn this paper, we examine the relationship between alternative finance and board structure on the cost of debt for firms, focusing on the unique effects of differing board characteristics. Using a dataset of 176 European listed companies observed annually from 2013 to 2022, we dissect this relationship through several hypotheses considering factors such as the supply of alternative finance, board gender composition, age, expertise, and board turnover. Our findings reveal that increased alternative finance credit supply escalates the cost of debt, especially for firms with lower ESG scores. Firms with young boards, boards specialized in economics or low, and board turnover also experience a rise in borrowing costs with increasing of alternative finance. Through a pooling 2SLS model, we provide robust evidence about the interplay of alternative finance and varying board structures on the cost of debt. This research clarifies the intricacies of bank-firm relationships in alternative finance and holds significant implications for supervisory authorities, banks, and policymakers. It underscores the necessity of good corporate governance in managing the cost implications of alternative finance. It calls for tailored risk assessment strategies, conducive regulatory frameworks, and vigilant supervisory approaches to create a resilient financial ecosystem where alternative finance can thrive without inordinately inflating the cost of debt.

Developing a framework for understanding policy decision-making behaviors in the transition of a HIV prevention program towards sustainability: a case study from Zambia’s voluntary medical male circumcision program

Faced with declining donor funding for HIV, low- and middle-income countries must identify efficient and cost-effective ways to integrate HIV prevention programs into public health systems for long-term sustainability. In Zambia, donor support to the voluntary medical male circumcision (VMMC) program, which previously funded non-governmental organizations as implementing partners, is increasingly being directed through government structures instead. We developed a framework to understand how the behaviors of individual decision-makers within the government could be barriers to this transition. We interviewed key stakeholders from the national, provincial, and district levels of the Ministry of Health, and from donors and partners funding and implementing Zambia’s VMMC program, exploring the decisions required to attain a sustainable VMMC program and the behavioral dynamics involved at personal and institutional levels. Using pattern identification and theme matching to analyze the content of the responses, we derived three core decision-making phases in the transition to a sustainable VMMC program: 1) developing an alternative funding strategy, 2) developing a policy for early-infant (0-2 months) and early-adolescent (15-17 years) male circumcision, which is crucial to sustainable HIV prevention; and 3) identifying integrated and efficient implementation models. We formulated a framework showing how, in each phase, a range of behavioral dynamics can form barriers that hinder effective decision-making among stakeholders at the same level (e.g., national ministries and donors) or across levels (e.g., national, provincial and district). Our research methodology and the resulting framework offer a systematic approach for in-depth investigations into organizational decision-making in public health programs, as well as development programs beyond VMMC and HIV prevention. It provides the insights necessary to map organizational development and policy-making transition plans to sustainability, by explaining tangible factors such as organizational processes and systems, as well as intangibles such as the behaviors of policymakers and institutional actors.

FISCAL POLICY CHANGES: OPPORTUNITIES AND RISKS FOR REGIONAL DEVELOPMENT

Purpose. Evaluation of recent fiscal initiatives in the context of ensuring a reasonable balance between the volume and sources of tax revenues, the distribution of such resources, and the maintenance of a necessary level of business activity in times of war or post-war recovery. The study also involves an analysis of the state and availability of alternative funding instruments for budgetary expenditures and an assessment of the impact of fiscal initiatives on taxpayers. Methodology of research. The setting goal was achieved through the use of such methods analysis of scientific literature, normative documents to study the situation with the payment and administration of taxes; comparison of revenues to the budgets by components and dynamics, sources of financing budget deficits; systematization and generalization of the literature on the possibility and risks of using certain proposed fiscal instruments. The study is based on the analysis of data from various sources, including budget indicators (income and expenditures by components, sources of financing the budget deficit), fiscal statistics (tax rates, number of taxpayers by types of taxes, tax debt), socio-economic indicators (demography, level destruction caused by military actions) and the legal framework. Findings. The article assesses the vulnerability of local budgets in the context of their own revenue sources during wartime conditions and the expected changes in fiscal policy have done. Key fiscal initiatives since the onset of the widespread Russian invasion are analysed, identifying limitations with the greatest impact on the formation of the resource base of local budgets. The study also explores opportunities for financing regional development projects through budgetary funds and analyses the existing fiscal model. Originality. The article introduces a new approach to examining the relationship between fiscal policy and regional development, taking into account contemporary trends and economic conditions. It elucidates the connection between fiscal initiatives and factors influencing economic development during conflict or recovery. Practical value. The proposed research results enable the evaluation of key risks and the adaptation of interaction models between fiscal entities to the challenges of the present and future. Also, and the relationship between fiscal initiatives and factors that determine economic development in conflict or recovery conditions is also explained. The research can be used by scientists to build models of minimizing losses for budgets and preventing losses of the local economy when forming fiscal policy in terms of the tax base, tax rates and powers. Key words: fiscal policy, taxes, government budget, local budgets, regional development, tax revenues, taxpayers.

GOVERNMENT VERSUS COMMUNITIES: PROVISION OF LOW-INCOME COMMUNITY HOUSING IN DAERAH ISTIMEWA YOGYAKARTA

Post-pandemic recovery in various sectors makes state and regional budget allocations unreliable for developing the housing sector. Even though the public's needs for housing continue to increase, coupled with the issue of limited land availability. To overcome that, the government began working to develop alternative financing for the housing sector through non-government funding, with the main target being the low-income community. Non-government funding is a non-conventional financing mechanism for infrastructure procurement through stakeholder collaboration. Daerah Istimewa Yogyakarta faces several issues regarding housing provisions for low-income communities. This research explores the prospects of implementing non-government schemes for low-income housing development through a comparative analysis between the community's willingness and ability and the policy stakeholder's capacity, potential trends, and future policy direction. The approach used in this research is deductive mixed methods, employing data collection through questionnaires to assess the willingness and ability of the community, as well as the Delphi method through expert interviews. This study reveals several disparities between the community's willingness and ability and the government's capacity as a provider. On the other hand, non- government funding for low-income housing is prospective in the long term, with specific considerations and preconditions. The result of this research is that by improving coordination between the community and the government, coupled with efforts to enhance mutual understanding and more effective communication between the two parties, holds the potential to advance the funding prospects for low-income housing development in Daerah Istimewa Yogyakarta. However, it requires a considerable amount of time under specific conditions.

Financing Supplier Through Retailer’s Credit

This study examines two retailer-initiated pre-shipment financing programs to assist capital-constrained suppliers in securing external funds for production. The first program is retailer-sponsored financing (RSF), an emerging practice in developing economies. Under RSF, the retailer commits to sharing the loan repayment obligation with the supplier by agreeing to pay up to a specific portion of the supplier’s bank loan repayment. The second program is advance payment (AP), a common payment arrangement wherein the retailer pays a part of the wholesale amount upfront to support the supplier’s production costs. We analyze a supply chain comprising a supplier and retailer. The retailer must choose between offering RSF, AP, or neither. Without RSF or AP, the supplier must opt for bank-direct financing when it is short of funds and bear the full responsibility of repaying the loan principal and interest. Our findings reveal a divergence in supplier and retailer preferences. Specifically, the supplier favors RSF as it not only lowers the marginal production cost but also permits the supplier to charge a higher risk premium to the retailer compared to AP. Conversely, the retailer prefers AP primarily due to the latter reason. Our research underscores the significance of RSF as a distinct financing alternative, enabling retailers to aid a supplier segment that cannot rely solely on AP. RSF also proves to be advantageous for banks by expanding their supplier clientele and boosting their lending volume. Interestingly, the supplier’s and retailer’s bankruptcy risks tend to have opposite impacts on the value of RSF.

Third‐party logistics firm's technology investment and financing options in platform‐based supply chain with 4PL service

AbstractIn practice, capital‐constrained third‐party logistics (3PL) firms usually obtain bank financing (BF) to invest in logistics technology to enhance the consumer shopping experience. The emergence of financial innovation has prompted the adoption of alternative financing modes by 3PLs, including e‐commerce platform financing (EPF) and fourth‐party logistics financing (4PF). To clarify the differences among the three financing modes at the operational management level, we develop a Stackelberg game model to capture the strategic interactions between the 3PL and creditors. We examine a platform‐based supply chain where a manufacturer sells products through an e‐commerce platform to consumers, with the logistics services for the supply chain provided by the 3PL and fourth‐party logistics (4PL) firms. The analysis results reveal that the equilibrium interest rates under EPF and 4PF share a similar pattern regarding the logistics service cost coefficient, the commission rate, and the 4PL service fee. The difference is that under EPF (4PF), the logistics service level increases in the commission rate (4PL service fee) but decreases under the other financing strategy. Furthermore, the 3PL is inclined to invest in logistics technology only when the fixed investment cost is low, and these financing modes are complementary rather than alternative. The 3PL and manufacturer can benefit from 4PF (BF) when the logistics service cost coefficient is large and the market size is small (large); otherwise, EPF can enhance their profits. We also find that when the opportunity costs of capital are homogeneous, both the 4PL and the platform are consistently willing to act as financiers themselves. However, when considering heterogeneity in the opportunity costs of capital, they may be reluctant to provide financing. Each financing mode may achieve Pareto improvements under specific conditions. Finally, we also analyze the impact of technology R&D risks and endogenous 4PL service fee, yielding some valuable insights.

ГРАНТОВАЯ ПОДДЕРЖКА МОЛОДЁЖНЫХ ИНИЦИАТИВ КАК АЛЬТЕРНАТИВНЫЙ ИСТОЧНИК ПРИВЛЕЧЕНИЯ БЮДЖЕТНЫХ СРЕДСТВ НА РАЗВИТИЕ ТЕРРИТОРИЙ

Nowadays, many Russian regions deal with the problem of attracting additional financial resources to the local budget, causing regional authorities to search for alternative funding to balance regional and municipal budgets. The implementation of youth initiatives is one of the key instruments used to launch social projects in the region. Moreover, these projects often attract additional funds to the region through public grants. Therefore, this paper is focused on the promotion and management of youth as a target social group, since it represents a powerful strategic resource for the development of individual regions and the country as a whole. This study will evaluate the impact of grants for young entrepreneurs' initiatives as a separate tool for the development of socio-economic situation in the Russian regions. Furthermore, this article will elaborate on the key effects of the implementation of these initiatives for the region in terms of the fulfillment of regional policy priorities.

The Role of Securities-Based Crowdfunding in Advancing the Local Economy for Small and Medium-Sized Enterprises (SMEs)

This article conducts an analysis of securities-based crowdfunding (SCF) as an alternative funding source outside traditional banking institutions. It explores whether the primary objective of SCF in Indonesia is indeed to advance the economy of the people, particularly focusing on Small and Medium Enterprises (SMEs). The article presents various perspectives on the concept of collective funding, where a group of contributors finance SME and startup projects, enabling these ventures to operate and progress. This approach aligns with the principles of a people-centered economy, which is characterized by an economy of the people, by the people, and for the people. The aim is to foster the people's economy, imbued with the characteristics of the Indonesian society which is religious and believes in sharing prosperity with others, as mandated by Article 33 of the 1945 Constitution of the Republic of Indonesia.