CrowdInvesting, an Alternative Financing Option for Senegalese Startups: An Analysis of Determinants (Revue Française d'Economie et de Gestion)

Summary

• A 2021 report by Gefona projected the global financing potential of crowdfunding to reach $1,375 billion in 2025, representing a 300% increase compared to 2015.p.3
• Financing costs through platforms like Rijaal Holding are relatively low compared to traditional banks and financial institutions, which charge 3%, 8%, and 14%.p.3
• The empirical study surveyed 312 individuals with a response rate of 66.67%, resulting in an analytical sample of 208 respondents, of whom 77 had already participated in fundraising campaigns.p.8
• A preliminary pre-test was conducted on 45 individuals to verify the reliability of the questionnaire before broad administration.p.8

Key insights

1. The Tabaski holiday exerts a statistically significant negative influence on crowdinvesting participation due to heavy consumer and travel spending.p.12
2. Presenting a business plan, diffusing a financing plan, and communicating profitability indicators positively influence investor financing decisions.p.12
3. Partnerships between crowdfunding platforms and accounting firms or asset management and intermediation companies significantly enhance campaign success.p.13
4. Investor behavior is positively influenced by a sense of belonging to the project locality, validating behavioral finance assumptions of emotional and non-purely rational investment motives.p.13
5. Project sector of activity and share nominal value positively affect investment decisions, reflecting the necessity to align share pricing with retail savings capacity.p.14
6. Disclosing expected earnings per share and dividend distribution frequencies did not demonstrate a statistically significant effect on Senegalese crowdinvestors' decisions.p.14
7. Senegalese authorities need to establish regulatory frameworks and accreditation commissions to protect crowdinvestors and enhance trust in online platforms.p.15