Link between Crowdfunding and Growth of SMEs in South Kivu (International Journal of Accounting, Finance, Auditing, Management and Economics)

Summary

• The global crowdfunding market is estimated at over $2 billion, functioning as a financial infrastructure that stimulates innovation and employment.p.3
• SMEs represent more than 90% of the local business population in South Kivu, but encounter major barriers accessing formal credit.p.4
• The study surveyed 105 SMEs under 10 years old operating in South Kivu that used crowdfunding to finance their development.p.4
• The average age of SME managers in the sample was 46.3 years, while average company revenue reached $567.p.11
• Participating businesses recorded a modest average profitability rate of 11.2% and an average composite growth index of 0.45.p.11

Key insights

1. Financial resources were present in 100% of the 105 surveyed crowdfunding recipient SMEs, acting as a universal entry condition rather than a relative variable.p.13
2. Technical resources generated a near-zero and statistically non-significant coefficient of 0.008 in the complete Logit model.p.13
3. The simple Logit model containing only crowdfunding variables explained a minimal 0.0018 of growth probability variance.p.12
4. Adding managerial control variables increased the Logit model explanatory power to a McFadden pseudo R² of 0.0618.p.12
5. At least 20 microfinance institutions went bankrupt in South Kivu over the past 5 years, eroding client savings and trust.p.4