Some Reasons Accounting for the Underutilization of Crowdfunding as a Financial Source for SMEs: The Case of Selected Entrepreneurs in Accra

Abstract

The overall goal of this study was to investigate some reasons accounting for the underutilization of crowd funding as a financial source to selected SMEs in Accra. The study employed qualitative research approach with semi-structured interviews as its main research instrument. A total of fifteen (15) SMEs dealing in various businesses were employed as sample size with the study being conducted in Accra only. The study reveals that, SMEs in Accra and Ghana at large do not utilize crowd funding as their source of financing SMEs related activities even though some SMEs owners have knowledge of the existence of crowd funding schemes and their contribution to the financing of SMEs partly due to reasons like absence of legal regime on crowd funding, low level of education among most SMEs owners on crowd funding, lack of government control, socio-culural factors and personal factors like preference of other sources of funding as against crowd funding. Moreover, the study reveals that, the underutilization of crowd funding to SMEs financing in Accra is largely due to some reasons like lack of education, legal, government, personal, and socio-cultural related issues. Again, the study has established that, the promotion of crowd funding scheme to SMEs financing in Accra hinges on factors such as government support, education, advertisement and linking crowd funding to SMEs The study has recommended the conduct of education and sensitization to SMEs and Ghanaians as a whole, and institutions of systems of support as necessary prerequisite to the development and advancement in the utilization of crowd funding in Accra.