Crowdfunding in some asean countries and implications for Vietnam

Nội dung text: Crowdfunding in some asean countries and implications for Vietnam

1. CROWDFUNDING IN SOME ASEAN COUNTRIES AND IMPLICATIONS FOR VIETNAM Vu Hai Yen*1- Vu Ngoc Huong - Nguyen Dieu Huong ABSTRACT: Crowdfunding is a method of raising funds to finance projects and businesses, in which money is collected from a large number of people via online platforms. It is an innovative way of accessing alternative funds for new projects and businesses with lots of benefits but also drawbacks and challenges for both investors and fundraisers. In this paper, we are going to (i) review some features of crowdfunding; (ii) analyze the development of crowdfunding in two ASEAN countries including Malaysia and Thailand; and (iii) providing a closer look at crowdfunding in Vietnam as well as making some implications for developing this method in Vietnam. Keywords: Crowdfunding, alternative funds, startup companies 1. INTRODUCTION OF CROWDFUNDING 1.1. Definition of crowdfunding According to the European Commission (2018), crowdfunding is a method of raising funds to finance projects and businesses, in which money is collected from a large number of people via online platforms (i.e. websites that enable fundraisers to interact with the crowd). It is an innovative way of accessing alternative funds for new projects, businesses or ideas, and is mostly used by startup companies or growing businesses. Fig. 1. Traditional funding vs. Crowdfunding. Source: European Commission (2018) 1.2. Classifications of crowdfunding As reported by the Financial Sector Deepening Africa (2017), based on return model, crowdfunding can be divided into four main types, including (i) loan-based crowdfunding (or peer-to-peer lending), (ii) equity-based crowdfunding, (iii) reward-based crowdfunding, and (iv) donation-based crowdfunding. * Banking Academy of Vietnam, 12 Chua Boc Street, Dong Da, Hanoi, Corresponding author. Tel.: +84902118486. E-mail address: yenvh@hvnh.edu.vn
2. INTERNATIONAL CONFERENCE STARTUP AND INNOVATION NATION 319 • Loan-based crowdfunding (or peer-to-peer lending) is a financial return model, in which individuals lend money to a project or business with the understanding that the money will be repaid with interest. This method is litlle different from traditional borrowing from a bank, except that money is borrowed from lots of investors. • Equity-based crowdfunding is a financial return model, in which individuals buy registered securities, by mostly startup companies or early-stage businesses. This method is similar to a venture capital or how common stock is bought or sold on the stock market. • Reward-based crowdfunding is a non-financial return model, in which individuals donate toa project or business with the expectation of receiving a non-financial reward (e.g. goods or services) in exchange for their money. • Donation-based crowdfunding is a non-financial return model, in which individuals donate to a project or business with no expectation of financial or material returns. Because reward and donation-based crowdfunding are non-financial return models, they usually lack financial regurations. Meanwhile, loan and equity-based crowdfunding are typically regulated financial activities in most countries. 1.3. Benefits of crowdfunding 1.3.1. For borrowers Overall, crowdfunding provides borrowers an opportunity to access money in an easier and cheaper way compared to traditional funding. Through online platforms, borrowers can quickly raise funds for their projects or businesses with no uprfront fees or collaterals. This is especially important for starup or early- stage companies which might be unable to access financial institutions’ funding services. Furthermore, borrowers can also get marketing benefits, including: rising public attention around the project; receiving feedback and expert guidance on how to improve the project; estimating the potential customer base (De Buysere et al, 2012; Gatautis and Vitkauskaite, 2014; Schwienbacher and Larralde, 2012; Whitla, 2009). Moreover, crowdfunding brings borrowers an opportunity to leverage their projects to raise additional outside funds (Mollick and Kuppuswamy, 2014). 1.3.2. For lenders Crowdfunding provides lenders or investors an opportunity to actively invest their money in new projects with or without financial returns. According to Gerber et al, 2012, Gerber and Hui, 2013, Hemer, 2011, and Oddani et al, 2011, the main motivations of lenders are: (i) identification with the subject and target of new projects and businesses; (ii) willingness to support small entrepreneurs, starup companies and early-stage businesses; (iii) satisfaction from sharing similar ideas with other investors; and (iv) enjoyment in participating and interacting with the project’s team to reach the general target. 1.4. Risks of crowdfunding 1.4.1. For borrowers According to the European Commission (2018), crowdfunding operates via online platforms which mostly use an all-or-nothing model. This means that if the funding target is reached, the borrower gets the money and if it fails, all investors will get the money back. Therefore, the first risk of crowdfunding is that borrowers might fail to meet a project’s goal. Moreover, borrowers, especially starup or early-stage
3. 320 HỘI THẢO KHOA HỌC QUỐC TẾ KHỞI NGHIỆP ĐỔI MỚI SÁNG TẠO QUỐC GIA companies, face challenges in estimating in advance the amount of targeted funds as well as disclosing innovative ideas and budget which might affect their intellectual property protection and competitive capacity (Agrawal et al, 2014; Pazowski and Czudec, 2014). Furthermore, crowdfunding brings borrowers lots of work relating to choosing platforms, building up investors’ interest, managing collected funds and so on, which worths much of time and effort. 1.4.2. For lenders Similar to borrowers, in order to optimize investments, lenders must obtain adequate understanding of crowdfunding models, which requires much of time and effort. Furthermore, due to information asymetries, lenders might face the risk of lacking knowledge and skills to evaluate the chances of success of the projects and verify how the funds collected are used (Mariani et al, 2017). According to Agrawal et al (2014), the main risks are fraud and abuse of funds. Specifically, the highest risks of lenders arise from financial return crowdfunding models and reward-based crowdfunding because the financial and non-financial returns might not be delivered as investors’expectations. Moreover, if the crowdfunding platform uses keep-what- you-earn or keep-it-all model (i.e. the borrower gets the money collected even if the funding target cannot be reached), the risk of failure will be higher for lenders. 1.5. Regulatory regimes According to the Financial Sector Deepening Africa (2017), there are four main regulatory regimes toward crowdfunding: • Lack of legislation: The crowdfunding market is classified as an exempt and there is no specific regulation on crowdfunding. In some cases, regulation protecting investors and fundraisers still applies, for example: problems relating to unfair interest rates, false advertising, etc. • Intermediary/platform regulation: Loand and equity-based crowdfunding are regulated as financial intermediaries, and usuall required registration and other regulatory requirements depending on the national law, for example business conduct, governance and reporting requirements. • Banking regulation: Loand and equity-based crowdfunding are considered banks, and thus required a banking licence for certain crowdfunding operations. Moreover, they are subject to full disclosure and reporting requirements. • Two-tiered regulation: Crowdfunding platforms are monitored at the national level along with the local/provincial level. Therefore, with the same national regulation, crowdfunding at different locations might receive different regulations. In the next section, we are going to analyze the development of crowdfunding in two ASEAN countries - i.e. Malaysia and Thailand – with the focus on financial return crowdfunding models before moving to Vietnam and making some implications for crowdfunding in this country. 2. CROWDFUNDING IN ASEAN COUNTRIES ASEAN is a dynamic area that consists of 10 developing and diverse countries, each of which is in a different stage of economic and financial development (Focus Economics, 2016). The region has a combined population of more than 622 million, and is the seventh largest economic region in the world, with a Gross domestic product (GDP) under $2.5 trillion (Wolfgang Lahmacher, 2016). ASEAN’s real GDP continues to grow at a rate of 4.5-5% annual (Focus Economics, 2016). By 2050, it is thought that ASEAN will constitute the fourth largest economy in the world (Vinayak H.V et al, 2014), with forecast that
4. INTERNATIONAL CONFERENCE STARTUP AND INNOVATION NATION 321 ASEAN will overtake the European Union (Rajeshni Naidu – Ghelani, 2015). In particular, it is apparent that small and medium enterprises (SMEs) play an important role in the significant economic development of ASEAN countries in recent years. A report by Deloitte (2015) pointed out the importance of SME sector in ASEAN-5 (Indonesia, Malaysia, Philippines, Singapore and Thai Lan), remarking that at least one – third of GDP and 70% of employment are assigned to SMEs. The role of SMEs to that development is recognized by the ASEAN itself, in terms of income and job creation, gender and youth empowerment through their diverse business engagements. Their presence is widespread in both non-urban and rural areas. Therefore, SMEs are the backbone of ASEAN and SME development is the foundation for achieving long-term and sustainable economic growth and narrowing the development gap (ASEAN, 2012). Obviously, SME is the backbone of economic activity in ASEAN, but they face fierce funding limitations in the traditional lending and capital markets. ASEAN has recognized that alternative funding source is an important way for SME to obtain funding requiring for the purpose of starting –up or executing innovative new creative projects that is hard to finance through traditional channels. Therefore, an alternative source of funding – crowdfunding - is being expanded in recent years. This section will highlight the key trend and development of crowdfunding in two ASEAN member states – Malaysia and Thailand with a focus on the existing and emerging regulatory and policy landscape. 2.1. Crowdfunding in Malaysia In 2015, a total of $3.36 million was mobilized across Malaysia through crowdfunding. It was a significant increase from $1.03 million in 2014 (Asia Pacific Benchmarking Report, 2016). Donation-based crowdfunding covered 92% of the market activity. In 2014, Malaysian made it the first country in ASEAN initiated a dialogue inviting contributions from various stakeholders related to the legal framework for equity-based crowdfunding. The first Malaysian guidelines were issued on February 10, 2015, followed by passing of the Capital Markets and Services Bill (2015) in July. Then, in September 2015, the Malaysia Securities Service (MSC) has introduced the Alliance of FinTech Community to promote greater interest in the development of financial technology and provide regulatory clarity to encourage innovation in the industry. The legal framework for equity-based crowdfunding became licensed in February 2015 as part of the MSC’s attempt to encourage innovation in FinTech. Building upon this framework, the MSC is now introducing the framework P2P legal, setting the registration requirements in Guidelines on Recognized markets. In 2015, a call for registration to be an equity-based crowdfunding was also announced. There were 27 applications to open their platforms, in which 6 registered equity-based crowdfunding platforms were approved in order to give SMEs greater access to capital in 2016 (List of Registered Market Operators for equity-based crowdfunding). 2.1.1. Equity-based crowdfunding in Malaysia: The Public Consultation Paper No.2/2014 - “Proposed Framework for Community Funding” was issued by the Securities and Exchange Commission on August 21, 2014. Subsequently, the Market Regulation Guidelines under Section 34 of the Capital Markets and Services Act of 2007 was published on February 10 2015. That document introduces new requisite for registration of equity-crowdfunding platform and provides administrative arrangements for such operations. It replaces the Guidelines on Regulation of Market that have been issued in September 2007. In 2015, six equity-based crowdfunding platforms became licensed after 18 months of the regulator engaging with the sector through consultation. The 6 platforms are: Alix Global, Ata Plus, Crowd+,
5. 322 HỘI THẢO KHOA HỌC QUỐC TẾ KHỞI NGHIỆP ĐỔI MỚI SÁNG TẠO QUỐC GIA Crowdonmic, Eureeca, Propella and PitchIN. Utimately, a new guideline named the Guidelines on Recognized Markets was issued on December 10, 2015 and was licensed on December 15, 2015. The Guideline provides general requirements for registration and the procedure, administration and operation of equity-based crowdfunding platforms in Section F of the Guidelines. In general, the Guideline uses the approach of the US model in regulating equity-crowdfunding. In principle, it recognizes both equity and P2P lending as a means of making capital from eligible communities. However, it imposes certain restrictions on its structure, such as limitations on the condition of the issuer (fund seekers) as set out in Articles 12.14 to 12.17, on money limits and investment limits as prescribed in Article 12.18 and Article 12.22, and on the type of investor for a micro-funding institution as mentioned in Article 12.17 of the Guidelines. Since the clauses of this Guideline are general, it is able to apply to both conventional and Islamic equity-based crowdfunding. The only clauses related to the Shariah requirements are the one on the appointment of Shariah advisors as mentioned in Part E of the Guidelines. There is no Islamic equity-based crowdfunding registered in Malaysia. This is different from Singapore which has encouraged one of the equity-based crowdfunding platforms to operate based on Islamic principles. Hence, with the expectation that there is a potential emergence of Shariah complaint equity-based crowdfunding in Malaysia, the current requirements are lacking proper regulatory and governance frameworks. 2.1.2. Loan-based crowdfunding in Malaysia Investing through a MSC-registered P2P platform means investors are buying securities in the form of investment notes or Islamic investment notes. The new P2P framework militated on May 2, 2016. Operators who were interested in establishing and operating a P2P platform would submit their applications to the regulator from May 2 to July 1. 2016. MSC set out a number of key tasks for the platforms. Loan based crowdfunding is available to all investors. However, the exposure of retail investors on any platforms is encouraged to limit to a maximum of 50,000 MYR at any given time (SC, 2016). 2.2. Crowdfunding in Thailand The crowdfunding industry in Thailand is yet underdeveloped in comparison to other countries. There are only a few platforms existing and most of them are reward or donation-based crowdfunding. However, crowdfunding in Thailand is effective as an alternative source of funding for SMEs, since Thailand banks have tightened the requirements for funding in the recent years (Santos, 2015). The role of these SMEs for the Thai’s economy is important because they attribute about 78% of the total employment market in the country and represent 37% of Thailand´s GDP as well (Santos, 2015). In 2016, the transaction value in crowdfunding in Thailand amounts to about US$ 1 million. However, until 2020 the transaction value is expected to show an annual growth rate of approximately 53%, which increases the total amount up to US$8 million in 2020 (Statista, 2015). Therefore, crowdfunding in Thailand might extent its importance within the next couple of years in order to ensure proper financing of SMEs - the drivers of the Thai’s economic growth. Thailand’s securities regime is supervised by the Securities and Exchange Commission (TSEC). The majority of TSEC’s regulatory authority in relation to securities is prescribed through the Securities and Exchange Act B.E. 2535 (1992) (SEA). While Thailand’s equity market has increased from 24% of GDP in 1997 to 97% of GDP at the end of 2012 (ADB, 2013), the lack of a capital market for startup and technology companies is a key limitation of this system. Thailand tries its best to improve the situation through the creation of a regulations regime catering to crowdfunding in general and to equity crowdfunding in particular. This framework was set out by the Capital Markets Supervisory Board on May 15, 2015.
6. INTERNATIONAL CONFERENCE STARTUP AND INNOVATION NATION 323 Equity-based crowdfunding in Thailand The regulatory framework which announced in May 2015 focused in two regulations: (1) Notification of the Capital Market Supervisory Board; and (2) Notification of the Securities and Exchange Commission. Despite these announcements, no potential equity-based crowdfunding platform ever became the approved equity-based crowdfunding portal in Thailand. The main obstacle was that the initial Equity- based Crowdfunding Notification only allowed escrow agents to hold investors’ subscription funds and there was no escrow agent’s interest in joining the equity-based crowdfunding. TSEC amended the Equity-based Crowdfunding Notification in 2016 to address this problem by allowing those following entities to perform this role: (1) intermediaries (derivatives or securities business operators) who are able to perform asset holding functions; and (2) reliable parties under the supervision of a regulator (for example: Bank of Thailand). Moreover, in this Notification, it is clearly seen that the capital requirement of being a crowdfunding platform in Thailand is quite different from many Asian countries, for instance, the minimum capital requirement for being a crowdfunding platform in Taiwan is 50 million TWD (around $1.6 million USD) instead of $0.15 million in Thailand. This indicates that it might be easier to establish a crowdfunding platform in Thailand; however, if compare to other countries, not only Asian countries but also western countries, the minimum capital requirement of crowdfunding platform in Thailand is significantly lower than other countries as well. Some legal scholars have expressed worry about the risk of investors and the risk of crowdfunding platform business failing due to the low capital requirement. Due to the reason that equity-based crowdfunding has just launched in Thailand, it will take some time to fully comprehend the practical challenge of regulations. But this must be viewed as a good beginning for the Thai crowdfunding sector. According to TSEC, in near future, ongoing discussions with potential equity-based crowdfunding platform operators, potential entities taking on the role of holding subscription funds from investors and the prospect for equity-based crowdfunding in Thailand is expected. 3. CROWDFUNDING IN VIETNAM AND SOME IMPLICATIONS 3.1. Crowdfunding in Vietnam 3.1.1. Number of crowdfunding platforms Crowdfunding is significantly growing in the world, but this concept is still relatively new for Vietnam. Crowdfunding is a new way to raise fund from a large community and an important source of fund for Startups. For new businesses, crowdfunding also brings them an opportunity to investigate the market whether their products or projects are well perceived by public or not. Even though this raising fund method is not common yet, the fact is that it is an emerging trend in Vietnam and more and more investors are attracted by this financial innovation. Generally, crowdfunding are organised in four types: lending-based, equity-based, reward-based, and donation-based. However, there are only three categories in terms of lending-based, reward-based, and donation-based which are operating in Vietnam. Equity-based crowdfunding platform has not been founded in the market. Some significant crowdfunding platforms are shown in the table below. Crowdfunding has just entered Vietnam in recent years as most of them were established in 2015. Even though the contribution of crowdfunding for financial development is modest, the potentail benefits that crowdfunding brings to the economy is relatively attractive.
7. 324 HỘI THẢO KHOA HỌC QUỐC TẾ KHỞI NGHIỆP ĐỔI MỚI SÁNG TẠO QUỐC GIA Table 1. List of crowdfunding platforms in Vietnam Crowdfunding Establishment No Field of activities Type of crowdfunding platforms year 1 Betado 2015 Public projects, art, movies, business. Reward-based 2 Comicola 2014 Comics industry Reward-based Software, agriculture, game, 3 Firststep 2014 Reward-based entertainment 4 Fundingvn 2014 Business projects Reward-based Music, art, design, game, electronic, 5 Fundstart 2015 Reward-based technology 6 Charity Map 2012 Charity Donation-based 7 Kindmate 2015 Charity Donation-based Personal loans and underbanked 8 HuyDong 2015 Lending-based investors. 9 Tima 2015 Personal loans, SME loans. Lending-based Source: The authors 3.1.2. Success of crowdfunding Crowdfunding have already achieved first remarkable traction while some flatforms have successfully raised funds for small businesses and startups. In addition, crowdfunding brings other benefits for startups such as providing market investigation and marketing instruments. Reward-based crowdfunding flatform is the most common form in Vietnam and has gained certain success such as Betado, Comicola. Comicola is considered as a successful crowdfunding flatform and has greatly contributed to finance young authors in comic’s field. This website has openned a new way for newcomers entering the publishing industry. While calling fund for business, Comicola also supports authors by offerring content advice to writers, contacting and making deals with publishers on the writers’ behalf. Until September 2018, Comicola has supplied more than 2.3 billion dong for 17 publishing projects. Another typical reward-based crowdfunding type is Betado. The platform intentionlly raises funds for art projects such as publishing books, generating music video, preserving culture, rising up public awareness. From the beginning until now, Betado has supported for 27 startups with 1.77 billion dong. However, there are 12 out 27 projects which have failed in calling for funds. Donation-based crowdfunding flatform is meaningful in Vietnam where many poor and low income people need to be helped. However, the fact that raising funds for charity is not effective as expectation due to several legal and operational issues. CharityMap was closed after 3 years operating. The other donation website – KindMate – has called for funds for 66 projects but 56 of them were unsuccessful since the rate of fundraising was lower than 50%. Lending-based crowdfunding platform proves a potential fundraising for individuals and small businesses. Two prominent websites in this field are Tima and HuyDong. The former is targeting on individuals, households and making small loans in short time. By September 2018, the number of loan applicants through website of Tima was 2,010,901 and the number of lenders was 20,399. Simultaneously, Tima has disbursed 41,512 billion dong to borrowers. The latter, HuyDong, focuses on financing SMEs. 3.1.3. Challenges for crowdfunding • Cultures and society On the investor side, most of Vietnamese people are risk averse. This means that it takes more time to persuade lenders to pour their money into new projects, even profit or non-profit plans. For charity projects,
8. INTERNATIONAL CONFERENCE STARTUP AND INNOVATION NATION 325 people are normally willing to help others in a short time rather than long time. For business projects, Vietnamese rarely believe in the ability of startups, due to their quality. Another aspect of Vietnam’s culture is business depends much on individual relationship and investors prefer financing funds for those they definitely know in advance. On the businesses side, Vietnamese people have a stronger fear of failure in comparision with the ones in the West. Therefore, they are more careful of sharing or discussing their ideas with public in general. • Technology Crowdfunding is a fundraising channel based on technology, thus, this flatform is heavily dependent on technological development. According to ITU (2016), Vietnam is one of countries which have a high degree of Internet and mobile utilization with more than 4.5 million internet users and 120.3 million mobile subscribers. This means the potential for crowdfunding development is so attractive. However, there are some technological issues in terms of data security and payment system that negative affect crowdfunding. (Hac H. Bui, 2017). Platform owners lack initiation and flexibility of protecting their data and data security is compeletely dependent on the government. Moreover, the forms of payment are becoming more diversifed in Vietnam, however, many people still prefer making payment through cash and bank transfer than 123Pay or PayPal, etc. • Regulation This is one of the main factors significantly impacting on crowdfunding development in Vietnam. Anh T. Nguyen (2018) indicated that until now, there is no offical legistration regarding to crowdfunding in Vietnam. Based on Credit institutions Law 2010, fundraising from public without State Bank’s approval is illegal. In fact, thanks to the lack of government regulation, crowdfunding is not banned at the moment. Due to the sharp increase in startups, the draft for Small and medium enterprises (SMEs) supporting Law has already mentioned to “crowdfunding” concept. On the other hand, this law has not been approved and the regulation related to crowdfunding is meagre and general. Some compulsory requirements have not been referred in this draft, for instance, how to register with Government’s agency, and how to report and supervise this service. Furthermore, the process related to starting a new enterprise in Vietnam is relatively complicated compared to the one in the West. Even though this process has been improved recently, the documental process of a business registration is complex to startups due to the lack of legalized documents, financial resources and weak management. Based on World Bank’s report, Vietnam is ranked 121th out of 190 countries based on the ease of starting a business (World Bank, 2017) • Startups limitations Apart from the objective factors, the main challenge for crowdfunding comes from the startups community itself. First, the qualities of projects provided by startups are not really good. Crowdfunding not only helps call funds for businesses, but aslo can be used as a tool for market exploration. By fundraising from public, a new innovation or product has an opportunity to demonstrate their advantage and benefit to public. Interested people can make comments and help startups to amend gradually their products. Nevertheless, the fact is not every startup can take advantage of crowdfunding to examine the market. Firms would focus on providing what they have rather than looking for what the market really needs. Next, marketing campains for crowdfunding and new startups are limited. Investors do not have much information about crowdfunding and how it works; therefore, they are more hesitant about putting money on this form.
9. 326 HỘI THẢO KHOA HỌC QUỐC TẾ KHỞI NGHIỆP ĐỔI MỚI SÁNG TẠO QUỐC GIA 3.2. Some implications for crowdfunding in Vietnam. Firstly, regulation and legal policies related to crowdfunding should be estabilished completely. An adequate legal framework will facilitate the development of crowdfunding and also build on investors’ trusts. Vietnamese policymakers can learn from Malaysia and Thailand in generating legal framework for community mobilization. For example, Malaysia imposes some restrictions on crowdfunding operators, startups and investors. For flatform operators, they have to prove their operational as well as technological capabilities to operate, detect risks and protect customers privacy. For issuers, Malaysia sets out limits on the maximum amount that could be mobilize through crowdfunding. For investors, policymakers divide them into some categories and put the limits on the amount of money they can lend. In case they want to invest more, they have to prove their income. Secondly, a reliable and modern payment infrastructure should be set up in order to create a basement for developing crowdfunding. Central Bank as well as commercial banks should enhance the variety of cashless payment including electronic payment and card payment. In line with expanding payment methods, regulators need to strengthen measures to detect and cope with data security violation or ensure cyber security. Thirdly, information and knowledge of crowdfunding as well as new fin-tech services should be provided to all investors and enterprises. Being highly awared of crowdfunding’ benefits and drawbacks could help investors make proper decisions on choosing reputable community raisingfund channels. CONCLUSION Crowdfunding is a method of raising funds to finance projects and businesses, in which money is collected from a large number of people via online platforms. It is an innovative way of accessing alternative funds for new projects and businesses with lots of benefits but also drawbacks and challenges for both investors and fundraisers. Crowdfunding might use financial return model (i.e. lending and equity- based crowdfunding) or non-financial return model (i.e. reward and donation-based crowdfunding). With the concern of investors’ benefits, the former model usually receives more regulation and attention than the latter despite the fact that the latter model usually dominates the market of crowdfunding in most countries. In Asia, crowdfunding is also developing and becomes more and more popular. By introducing the legal framework for equity-based crowdfunding, Malaysia is the first ASEAN country which has established a regulatory regime for a particular type of crowdfunding, followed by Thailand. These countries are on their way of improving the current regulation and developing new regulatory regimes for other types of crowdfunding, especially lending and reward-based models. In the context of growing funds raised by crowdfunding but lacking regulation on this issue, Vietnam should pay more attention on generating a legal framework for crowdfunding, setting up a reliable and modern payment infrastructure, and providing adequate information or knowledge of crowdfunding in order to encourage the development of this innovative method of raising alternative funds for SMEs, especially startup of early-stage businesses. REFERENCES Agrawal, A., Catalini, C., Goldfarb, A. (2014). Some simple economics of crowdfunding. Innov. Policy Econ. 14 (1), 63-97. ASEAN. (2012). SME Developments in ASEAN, Retrieved from: sectoral-bodies-under-thepurview-of-aem/small-and-medium-enterprises/. Asian Development Bank. (2013). Country Partnership Strategy: Thailand 2013–2016, Sector Assessment (Summary): Finance. Retrieved from:
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