Crowdfunding Practices and Productivity of Small Businesses: The Role of Investors’ Attitudes and Government Policy
The study examined the influence of crowdfunding practices on productivity as a measure of survival for small businesses in Lagos State, Nigeria. The study adopted survey research design. Data were collected using questionnaire administered to 484 small businesses in Lagos State across the five (5) divisions/Ibiles (Ikeja, Ikorodu, Lagos Island, Badagary and Epe) and analysed using descriptive frequencies and structural equation modelling (SEM). The results revealed that Productivity of small businesses in Lagos state responded significantly and positively to Donation based-DB, Equity based-EB, Loan based-LB and Reward based-REB respectively, while Royalty based-RB and Invoice trading-ITC had positive but insignificant impact. Also, that both Investor’s Attitude (IA) and Government Policy on Crowdfunding (GPC) had negative indirect trend on crowdfunding practices and small business survival measured in terms of productivity. The study concluded that DB, LB, EB and REB crowdfunding practices are alternative and creative source of funding for small businesses that contribute positively and significantly to productivity. In view of the findings, the study recommended that proprietors of small businesses should identify and concentrate on crowdfunding practices that influence its productivity and concomitantly guarantee survival of the business. Furthermore, study recommended that investors (fund backers) and fund raisers should be of good behavior and demonstrate transparency in their crowdfunding activities and also adhere to set rules and regulations by SEC and other regulatory authorities on crowdfunding. Keywords: Crowdfunding, government policy, investors attitude, productivity, small businesses.