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Crowdfunding in Saudi Arabia: A Case Study of the Manafa Platform

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  • Heba Gazzaz

Abstract

Crowdfunding is an innovative form of financial support that is increasingly used around the world. Crowdfunding can provide a new investment channel and help those with innovative ideas and start-up businesses to circumvent traditional financing struggles and secure alternative finance. This paper presents an overview of crowdfunding, its fundamentals, and its main participants. Specifically, it explores the characteristics of crowdfunding in Saudi Arabia by examining the first and successful crowdfunding platform (Manafa) to be licensed by the country¡¯s capital market authority. This paper shows that the sole applicable model in Saudi Arabia is equity-based crowdfunding, and this is significantly controlled and operated under a more efficient legal framework than much foreign crowdfunding. However, the Saudi market would benefit from greater awareness of crowdfunding as a new investment channel, and from the introduction of the debt-based crowdfunding model in accordance with Saudi market regulations.

Suggested Citation

  • Heba Gazzaz, 2019. "Crowdfunding in Saudi Arabia: A Case Study of the Manafa Platform," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 11(11), pages 1-72, November.
    • Handle: RePEc:ibn:ijefaa:v:11:y:2019:i:11:p:72
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    References listed on IDEAS

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    1. Paul Belleflamme & Nessrine Omrani & Martin Peitz, 2016. "Understanding the Strategies of Crowdfunding Platforms," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(2), pages 06-10, 07.
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    6. Anglin, Aaron H. & Wolfe, Marcus T. & Short, Jeremy C. & McKenny, Aaron F. & Pidduck, Robert J., 2018. "Narcissistic rhetoric and crowdfunding performance: A social role theory perspective," Journal of Business Venturing, Elsevier, vol. 33(6), pages 780-812.
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    Cited by:

    1. Mohammed Alharbey & Stefan Van Hemmen, 2021. "Investor Intention in Equity Crowdfunding. Does Trust Matter?," JRFM, MDPI, vol. 14(2), pages 1-20, January.
    2. Alet C. Erasmus & Geoffrey Tocknell & Flip Schutte, 2023. "The potential of crowdfunding to promote business in the context of an emerging economy," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(3), pages 558-569, September.
    3. Ali Saleh Alshebami, 2022. "Crowdfunding Platforms as a Substitute Financing Source for Young Saudi Entrepreneurs: Empirical Evidence," SAGE Open, , vol. 12(3), pages 21582440221, September.

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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