Crowdfunding: study of the viability of a new method of financing small and medium enterprises in Algeria

Abstract

Our study aims to understand the current failure of crowdfunding in Algeria, we conducted a two-step study. First, we extracted from the literature the various factors that contribute to the success of this funding process and those that hinder it. We specified the influence of these factors in the Algerian context. In the second step, we surveyed a group of persons that follow a double-skill management degree in entrepreneurship and project management to know their opinion about crowdfunding. The results show that the surveyed were significantly unaware of crowdfunding, ie, 64% of our sample with a p-value> 0.05 (p= 0.151); as for their view of the current failure of crowdfunding, 51.5% feel that it is due to a lack of information. 29.7% think is due to a lack of trust. 8.9% think there are few investors; others put it down to a lack of ideas, ie, 7.9% of those questioned, and 2% think it is for other reasons. 58% of the subjects see themselves as project holders, only 8.9% are ready to be funders, and 3.26% think they could be both. The results clearly show a statistical bias towards being more of a project holder than a funder (with a p-value of 0.48). On that account, Algeria could be a favorable ground for Crowdfunding if more people were more informed about this process and more funders were available.