Entrepreneurs’ Financing Sources and Crowdfunding as Newly Emerged Source of SMEs Financing

الملخص

Entrepreneurship is a procedure regarding the formation of Small and Medium Enterprises (SMEs) that are the main source of creation of wealth, investments, eradication of unemployment and brings new ideas in emerging as well as developed economies. SME’s financing methods differ from country to country. However, leading sources are financing through banks and alternative or non-bank financing sources. Present research explores crowdfunding as one of emerging sources for financing entrepreneurs. It is an online fundraising from a large number of people (crowd) through the intermediation of crowdfunding platforms. Unfortunately, not much concentration is given in the SMEs sector of Pakistan. Banks prefer lending to large scale companies. Lending process from banks is too formal and complicated. For this reason, SMEs cannot afford costly and complicated lending processes and seek alternative financing sources. Crowdfunding as a financing source for SMEs is a quite a new concept, and very few studies have dealt with this concept. Present research is different in the context of application of crowdfunding in Pakistan, hence descriptive and exploratory research methods are used.