Crowdfunding and smes financing in nigeria- threat and opportunities

Crowdfunding is a new dimension of sources of finance which provides Small and Medium Enterprises (SMEs) and other creative ideas initiators the opportunity to raised fund from the crowd by harnessing the power of the internet. As a new form of financing opportunity, the key knowledge of the concept is lacking on the part of entrepreneur, the financial expert, academicians and the general public. This calls for better understanding of the concept, models, element and environmental characteristics for its implementation and usage by entrepreneurs. It is against this background that the study examined crowdfunding as alternative sources of finance for SMEs. The study employed an exploratory research design with focus on literatures on the field of accounting and finance relating to the topic. The study concluded that one of the innovative ways for SMEs and creative ideas initiators becoming increasingly important and irreplaceable in promoting economic development is to improve on method of financing through crowdfunding as this had contributed to growth of SMEs in some developed countries. However, in Nigeria, there is the need for government to provide the regulatory framework and awareness that will support crowdfunding with good internet network for interaction between the promoters and investors.