Innovating in party financing: Digital microcredits in Spanish Podemos and PSOE

A new form of campaign financing emerged in the Spanish party system developed by Podemos party: microcredits. By using digital technologies, Podemos microcredits are electoral funding initiatives based on civil loans from the party’s activists and sympathisers (at zero percent interest rate). The party returns the loans, once it receives the State subsidies for elections, normally one year later. Despite the current Spanish electoral and financing regulation does not specifically contemplate this type of campaign financing, it has been used since 2015. Other parties have also joined Podemos in using microcredits, including smaller or regional left parties (e.g. United Left, ERC, Más País) and, notably, the Socialist party (PSOE). Opposite to Podemos, the Socialists have implemented them with a different perspective. Indeed, PSOE has granted a competitive interest rate and has broadened the scope of this financial innovation, including party’s processes not linked to electoral campaigns. Thus, we categorise two types of microcredits, with different rationale, objectives, and uses. What are the characteristics of the two microcredits? Why have they been implemented? This paper aims to analyse the logics, implementation and uses of microcredits by comparing Podemos and PSOE cases and to discuss the possible consequences for the relation between members (and electorate) and the party through party financing.