Abstract:

Financing of SME’s has been a centre of debate among the academia as well as policymakers for almost a century. In general, financing involves risks; however, the level of risk associated with mature firms is low compared to business start-ups. Therefore, to attract more investors, these start-ups have to pay higher bank rates than established firms. This research explores the importance of crowdfunding as a new form of financing for traditional ventures, and how it has become a unique and different type of financing compared to the traditional form of financing. This study describes different kinds and prototypes of crowdfunding that currently exists in society, and it illustrates the overall market scenario of crowdfunding in Pakistan. This article examined the Pakistani crowdfunding market with the mainstream market. The analysis highlights that awareness among the community about crowdfunding in Pakistan is getting popular and positive results are numerous. However, despite being a new concept, its market size is comparatively smaller than the venture capital market and the banking industry