Post Mortem

Economic potential of the reward-based crowdfunding

By Nagaland Post | Publish Date: 9/8/2020 12:18:39 PM IST

 Except during the great economic depression of 1929, no other time, perhaps, mankind has experienced so intense economic devastation ever like the ongoing Covid induced situation. Even during the World Wars also, the economic desolation was never that acute. Common people are losing their businesses, their jobs, their all the means and ways of livelihood now. The fate of the wage-labourers of the unorganized sectors is beyond all comprehensions. The situation has ensued such that famine and civil-wars may erupt at any time anywhere in the world. Surely, it will take many years to restore the economic normalcy back into forth again.

Crowdfunding has stood as a ray of hope for millions at this dismaying juncture. Crowdfunding is the practice of funding a project or venture by raising small chunks of money from a large number of people through donation. It is a practice prevalent in our society from before. Our Temples, Masjids, Churches, Stupas etc. raise funds for all sorts of their day to day operations through crowdfunding. The issuing of the initial public offers(IPO) by the big business houses to fund their cherishing projects in terms of shares to the public may also be viewed as a form of crowdfunding only. Crowdfunding has been used to fund a wide range of for-profit, entrepreneurial ventures also nowadays such as artistic and creative projects, medical expenses, travelling, community-oriented projects, socio-economic developmental projects etc.

Crowdfunding can be mostly of two types: reward based and equity based. In reward based crowdfunding, the entrepreneurs pre-sell a product or service to launch a business concept without incurring debt or sacrificing equity or shares. On the other hand, in equity based crowd funding, the backer receives the shares of a company, usually in its early stages, in exchange for the money pledged. Security and Exchange Board of India (SEBI) regulates the legal aspects of crowdfunding in India. Internet sources reveals that equity based crowdfunding is illegal in India whereas reward based crowdfunding is absolutely legal and it has the untapped potential to harness.

Crizer World is such a reward based online crowdfunding platform and it is propagating gradually throughout the world these days. This system identifies itself as a community based helping programme which assures 100% distribution of its funds among its members and it has the motto “by the people, for the people”. It has recently launched a digital currency point also named “Criza” which is equivalent to Rs 80 and transactions are made via Criza in this system. As per their proclamation, after some time, Criza can be exchanged with any currency of the world too. The system is equipped with a very tempting jargon called ‘autopool’ which promises high monetary gains within 2 years time even without promoting it to anybody. Very interesting recursive mathematical algorithms are explained as the source of this high return which seems quite realistic. A company is registered in London titled “Crizer Technologies Ltd” recently and this registration will validate Crizer World into the online segment business. In their website, they are disclaiming that Crizer World is heading for digital utility wallet, social media app, search engine etc. soon.

Even though the system is just 9 months old, it has more than 1.75 Lakhs contributors so far all over the world. Alexa, a subsidiary of amazon.com reveals that the traffic of Crizer World is prevalent globally, of course mostly in India and Kuwait as of now. As per the other internet sources, there are hundreds of beneficiaries of Crizer World so far in Gujrat and Maharastra and the system is experiencing significant incremental growth day by day. Some people have started believing that Crizer World has the potential to eradicate poverty from India and fulfil the dream slogan of our Prime Minister, “The Atmanirbhar Bharat”.

In the North-east also including Nagaland, Crizer World has stepped its prominent footprint already. People have obviously dubious speculations on the longevity and legitimacy of such platforms in either ways. But, we shouldn't ignore the opportunities that this system may provide to all of us in the long run. It may be a game-changer also in the days to come. I appeal to the experts, both legal as well as economic, to ponder into it in-depth and deliberate their views soon.

Ranjan Das, Patkai Campus, Chümoukedima

Launched on December 3,1990. Nagaland Post is the first and highest circulated newspaper of Nagaland state. Nagaland Post is also the first newspaper in Nagaland to be published in multi-colour.

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