Impact of Crowdfunding on SME Growth

Author

Kambaza,Bright Takudzwa

Title

Impact of Crowdfunding on SME Growth

Abstract

The research investigated the impact of crowd-funding to small and medium enterprise growth using Harare province as a case study. The other research objectives were to, asses the problems encountered by SMEs when they use crowd-funding and to recommend strategies that modernize crowd-funding. The resource based theory was assumed, descriptive, causal research design was adopted. The sample size was made up of 30 SMEs which have used crowd-funding before. The study was able to achieve a response rate of 96.7%. Questionnaires were used to collect primary data. For the analysis of responses from Harare province entrepreneurs, the research employed regression analysis and descriptive statistics. The findings of the data are: crowd-funding has a strong positive impact on growth of SMEs, the challenges SMEs face in using crowd-funding include, the ignorance of non-professional investors, the lack of trust towards data protection, the complexity of taxation aspects for investors, the lack of a specialized legal framework for crowd-funding domestically, compliance costs too high and the strong competition from other national crowd-funding platforms. The study recommends that founders attain attractive professional characteristics, upload the founder information on the crowd funding campaign profile, increase number of friends from social networks, and make high campaign targets. In addition to that, the research recommends that be formed a local crowd-funding dimension. Areas of further studies include the effect of crowd-funding on innovation and a precautionary measure study on due diligence processes against problems SMEs face in accessing crowd-funding funds.

Date

2022

Publisher

BUSE

Keywords

Crowd-funding

Small and Medium Enterprise

Growth

Supervisor

Dr Maune