How Do Alternative Financing Models Address and Highlight Structural Failures Within Traditional SME Financing Systems in South America's Smaller Economies?Chacon Urdininea, Carlos CrowdfundingSME FinancingFintechFinancial InclusionFinancing GapFinancial RegulationSouth AmericaBoliviaParaguayEcuadorEmerging EconomiesFinanceB SSmall and Medium-sized Enterprises (SMEs) in Bolivia, Paraguay, and Ecuador face chronic financing gaps that hinder their growth and economic impact. Traditional banks and microfinance institutions often fail to meet SME needs due to high collateral requirements, steep interest rates, and rigid procedures. This thesis explores crowdfunding as an alternative financing model with the potential to both bridge these gaps and expose the inefficiencies of conventional financial systems. By enabling funding for SMEs previously considered "unbankable," crowdfunding challenges the assumptions and limitations of traditional finance. The study is guided by the question: How does crowdfunding address SME financing gaps in these countries, and how does it reveal the shortcomings of traditional banking? Using a mixed-methods approach and focusing on Prospera, Bolivia’s first crowdfunding platform, the research contributes to the understanding of fintech’s role in underbanked economies and offers practical insights for regulators, financial institutions, and fintech innovators in evolving policy environments.Brian Spangler Davis, Thesis SupervisorBrian Spangler Davis, Thesis Honors AdvisorStefan M Lewellen, Faculty Readeropen_access2025-07-16T22:35:09Zhttps://honors.libraries.psu.edu/catalog/9864cfc5780