Growing the African Economy Through SMEs: A Consideration for Crowdfunding

Abstract

Globally, the role of by SMEs in economic development and growth through the provision of employment, poverty alleviation and contribution to Gross Domestic Product (GDP) has been widely acknowledged. Various governments have provided policy support to ensure that this role is sustained. Despite this support, SMEs are still faced with inability to access capital from the conventional banks. Crowdfunding emerged as an alternative source of funding for SMEs. This study is about how SMEs can contribute to the growth of African economy using Crowdfunding as alternative source of funding. The study employed exploratory design method focusing on comprehensive and comparative review of existing articles, journals, periodicals and other relevant literatures to gain insight into factors militating against access of funds by SMEs and the role of crowdfunding as alternative fund sourcing method available to SMEs. The study recommended that government should as a matter of urgency developed rules, regulations and framework that will guide the modus-operandi of crowdfunding. The study also recommended that SMEs should learn from developed economies like that of USA and France where crowdfunding had been successfully used as alternative funding source for greenhorn projects.