Indian crowdfunding platforms hit by absence of regulatory framework

There is also a great propensity to donate where the need is urgent and the solution is permanent. Towards this, healthcare providers can play a pivotal role by recommending crowdfunding options to families of patients, who cannot raise funds within a short period of their own. It is a fact that millions of people and aid organizations received help during the dreaded Covid-19 phase by crowdfunding platforms

The last couple of years have seen the emergence of crowdfunding healthcare online platforms in the country, which all are endeavoured to make available quality and affordable healthcare to the economically-hit families during times of health emergencies. The pinch will be felt more when they have to go in for specialized treatments in tertiary hospitals.

Tertiary healthcare costs in millions, which the anguished families have to raise within a limited time-gap, if not in a couple of hours, to save their ones. It is to such hard-pressed families that crowdfunding is godsend as there is no particular economic background of people, who can raise funds online. Apart from the general crowdfunding and donations, exclusive plans have been launched by some of crowdfunding healthcare online platforms. For instance, Ketto launched the Social Impact Plan (SIP) initiative to bridge the healthcare affordability gap. This provides succour to families, whose critically-ill children are in urgent need of advanced surgery. The program is focused on building a community that pledges to help others by providing monthly donations. The monthly donation facility has been a sound move as contributors can budget their spending accordingly while onto this noble cause. SIP has managed to save hundreds of children with their timely support.

Another platform Milaap.org has reportedly supported over 1.5 lakh cases across the country. With more and more people coming to know of the innovative financing option, it definitely increases access to quality healthcare.

There is also a great propensity to donate where the need is urgent and the solution is permanent. Towards this, healthcare providers can play a pivotal role by recommending crowdfunding options to families of patients, who cannot raise funds within a short period of their own. It is a fact that millions of people and aid organizations received help during the dreaded Covid-19 phase by crowdfunding platforms. In an attempt to help those whose lives have been worst affected by the pandemic, a separate page, milaap.org/covid19 was launched by another platform Milap. Such crowdfunding projects will highlight citizen initiatives across India to mitigate the economic crisis faced by vulnerable families, as well as support those who are in the frontline.

All said and done, there is a need for regulatory framework to ensure that there is a proper compliance procedure in place. Since crowdfunding platforms have bridged the affordability gap and helped patients in financial distress, these providers have now highlighted the need for regulatory framework and legislation to bring in transparency in this emerging sector.

There are no two opinions that crowdfunding platforms have gained popularity in India as they allow individuals to raise money for various causes and projects via the internet. But, these platforms are facing challenges due to a lack of regulatory framework. One of the main issues faced by crowdfunding platforms in India is the lack of a clear regulatory framework. The government can address this issue by introducing a legislation that outlines the rules and regulations governing crowdfunding in the country. This could include guidelines on disclosure requirements, consumer protection measures, and tax treatment of funds that have been raised through crowdfunding. Only then can the emerging industry bloom to its fullest potential.

At present, the reach of the crowdfunding sector is still limited due to this lack of clarity. Millions of people can receive the benefits if regulations surrounding crowdfunding transactions are streamlined. For instance, in Singapore donation-based crowdfunding is booming and the Commissioner of Charity (COC) established a code of practice for online charitable fundraising appeals. It is designed to ensure accountability, legitimacy, and transparency of charitable appeals. It requires online fundraisers to complete a declaration of compliance with the fundraising regulations. The code of practice aims to guide fundraisers to make accurate representations to donors. They also keep proper donations records as well as use the donations for the expected purpose intended. Several countries with a much smaller population than India have specific crowdfunding regulations in place, which has helped businesses, individuals, and charities leverage the power of the crowd for their causes, dreams, or emergencies.

For people with no access to a primary mode of financing, crowdfunding is a new era fuelled by the crowd that supports them. Clarity on regulation and legal accountability will make a big difference on how a crowdfunding-powered economy will function. Therefore, by providing a supportive regulatory environment, the Union government can help crowdfunding platforms to thrive and contribute to the country's economic development and to achieve a healthier India.