The Role of Homophily among Marginalized Groups in Pro-Social Crowdfunding: An Empirical Study of Kiva

Pro-social lending crowdfunding offers alternative channels for alleviating the financial challenges faced by marginalized groups. While previous research largely focused on discrimination (e.g., race and gender bias) in crowdfunding, the behavior of marginalized individuals as lenders remains underexplored. Drawing on homophily and social identity theory, we analyze 1,500 agricultural projects posted on Kiva to examine how marginalized identities influence lending decisions. Empirical results indicate that nonwhite lenders demonstrate race homophily by preferentially supporting borrowers of similar racial backgrounds and contributing larger loan amounts compared to white lenders. Conversely, female lenders do not display gender homophily in their lending behavior but contribute larger amounts than male lenders. These findings extend existing crowdfunding literature by highlighting the nuanced role of social identity and homophily in prosocial contexts. Our results offer practical implications for platform design to enhance inclusivity and resource allocation efficiency.