BERLIN, April 23 (Reuters) - The German parliament approved tighter rules on Thursday for firms selling financial products, including online platforms that support fledgling businesses through crowdfunding, in order to protect small investors against heavy losses.

Crowdfunding allows individuals and small businesses to raise funds, often via the Internet, from pools of investors who put money into peer-to-peer schemes or securities such as unlisted shares.

Worried that German companies are falling behind in the digital age, Chancellor Angela Merkel's government is keen to promote innovation and start-ups.