Prelims 2026 · Economy · Question 97
Which of the following statements about Crowdfunding is/are correct ?
- Crowdfunding is solicitation of funds (small amount) from multiple investors through a web-based platform or social networking site for a specific project.
- Small and Medium Enterprises (SMEs) are able to raise funds at lower cost of capital without undergoing rigorous procedures.
Select the answer using the code given below :
Answer
Both 1 and 2
SEBI’s consultation paper defines crowdfunding as raising small sums from multiple investors through a web-based platform/social network for a specific project, venture or cause. The same paper explicitly lists as a benefit that SMEs can raise funds at a lower cost of capital without undergoing rigorous procedures. Therefore both statements are correct.