Equity crowdfunding gains traction in Asia

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Equity crowdfunding is slowly gaining traction in Asia as countries begin enforcing new regulatory measures amid a pronounced start-up boom. The practice, essentially a group of investors pooling funds to buy shares in start-ups via crowdfunding sites, is sometimes hailed as the democratization of finance and the next leg in funding for small-to-medium enterprises (SMEs). More than $16 billion was raised through global platforms last year, and that’s expected to double in 2015, according to a report by research firm Massolution earlier this year. By 2016, global equity crowdfunding could account for more funding than today’s entire venture capital (VC) industry, the report added.

As bank lending in several Asian economies begins to slip, governments are increasingly betting on this alternative financing channel to boost entrepreneurship and innovation.

Malaysia became the first country in Asia-Pacific to legislate equity crowdfunding, approving six operators earlier this year. Thailand, meanwhile, only released an operating framework this year.

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