Crowdfunding Financing as an Alternative Way of Financing Small and Medium Sized Enterprises of the Republic of North Macedonia

Abstract

Since the emergence of major economic crises in the world, funding has become one of the most current research topics. In developed and underdeveloped economies, SMEs play an important role for the whole economy. The biggest problem facing SMEs is the lack of cheap alternative funding sources. The paper will analyze group or crowdfunding financing as a new potential for alternative SME financing in the Republic of North Macedonia. Crowdfunding means finding finance through social platforms from the public or a group of people who want to fund a particular project or innovation. This type of funding means a modern source that has emerged as a result of the development of technology and result of the increase in the use of the Internet and social platforms. In the Republic of North Macedonia, especially SMEs, except for traditional sources of financing, haven't alternatives for financing business activities. SMEs in our country in most cases finance their activities through their own savings, loans from their families and friends and from banks. The underdevelopment of the financial sector and the lack of sufficient collateral by SMEs are forcing managers to use these traditional sources of funding. Especially in developed countries, one of the alternative sources of funding especially for start-ups is crowdfunding. During 2019, the Macedonian Stock Exchange of the Republic of North Macedonia took a step to offer a new alternative source of funding through the FOUNDERBEAM crowdfunding platform. The research paper examines the theoretical framework and the way group funding works, will analyze the operation of several social platforms around the world and will ultimately provide a case study of Founderbeam platform that is offered by North Macedonian Stock market as an alternative source of financing for small and medium enterprises in the Republic of North Macedonia.