Crowdfunding as a Source of Financing in Russia: PEST Analysis

Abstract

The article focuses on the features of crowdfunding in Russia. The method of research is PEST analysis. The objective of the study was to analyze opportunities as well as problems and unsolved issues that are connected with crowdfunding in Russia. The main drivers of the development of crowdfunding in Russia, revealed in the paper, are as follows: new legislation, devoted to the crowdfunding; real need of small and medium enterprises as well non-governmental organizations in additional financial resources; demand from individual and institutional investors for new investment opportunities, especially under the conditions of lowing of the interest rates; active use of financial technologies. The most serious factors, that constrain crowdfunding in Russia, identified in the paper, are as follows: some unsolved regulatory issues; poor investors’ protection and possibility of fraud; low levels of real income and savings; low profitability of many businesses. The analysis provides a basis for different participants (projects’ founders, investors, policy makers) to exploit opportunities and minimize threats of this new approach in the sphere of finance.