Dynamics from Lending-Based Prosocial Crowdfunding in Eastern Europe: Personal Versus Business on Funding Performance

This study examines the impact of personal versus business loans and soft informationSoft information on the funding performancePerformance of prosocial peer-to-peer crowdfunding in European transition economies. Using 29,432 microloansMicroloan collected from Kiva (2011–2018 period) and a censored tobit regression on funding speedFunding speed, we find that personal loansPersonal loans produce quicker funding speedFunding speed. Lenders select projects perceived as having a greater impact on poverty alleviationPoverty alleviation. Business loans reveal a quasi–U-shaped relationship between soft informationSoft information and funding speedFunding speed, particularly for loans allocated to traditional sectors. Lenders appear to be aware that business loans are rationality-based, whereas personal loansPersonal loans are charitable-based decisions.