Applicability and Readiness of Crowdfunding in the Egyptian Ecosystem

This project thesis constitutes a comprehensive exploration of the feasibility of crowdfunding as a groundbreaking financial avenue within the distinct Egyptian context, with the ultimate goal of fostering entrepreneurial endeavors, innovation, and economic advancement. Crowdfunding, a distinctive funding mechanism harnessed by entrepreneurs and organizations, effectively utilizes web-based platforms to consolidate resources from the general public or multiple individuals in the form of contributions or investments. The global crowdfunding market is expected to reach $96 billion by 2025, surpassing the scale of global venture capital investments by 1.8 times. However, Egypt’s economic landscape is marked by an underdeveloped capital market and a dominant banking sector, leading to limited options for raising capital. the primary objective of the project is to evaluate the preparedness of the Egyptian economic landscape to embrace crowdfunding practices, while concurrently evaluating the level of awareness and acceptance among potential users, thus paving the way for Egypt's entry into the realm of crowdfunding markets. This research also encompasses several specific sub-objectives, such as exploring the global applications of crowdfunding across various contexts and identifying the inherent challenges associated with the adoption of crowdfunding in Egypt through in-depth interviews. Lastly, it aims to propose strategic pathways to mitigate the aforementioned challenges and promote the effective implementation of crowdfunding in Egypt. This study undertakes a comprehensive analysis, utilizing a developed survey derived from the German crowdfunding barometer to uncover the levels of awareness, acceptance, and engagement of the general public in crowdfunding. Additionally, key stakeholders have been interviewed to validate the findings of the survey and further investigate key aspects identified by the World Bank , including the entrepreneurial ecosystem, economic regulations, societal involvement, and technological infrastructure, all of which are fundamentals to the successful implementation of crowdfunding. Moreover, the policy analysis entails the identification and definition of the key elements, processes, characteristics, and dimensions of the policy mix concept, analysis of the policy processes, delineation of the analysis boundaries, operationalization of the policy mix, and consideration of the interplay between policy and technological change. This research transcends mere analysis and proposes targeted policy recommendations tailored to the Egyptian context, aimed at cultivating an environment conducive to potential crowdfunding applications, such as the imperative need for a clear legal framework and rigorous due diligence in the licensing and registration process pertaining to the platform's operations, technology, risk management, and investor protection measures, among other specific policy regulations for effective and safe crowdfunding in Egypt. The principal finding of this research is that Egypt holds a promising position within the spectrum of crowdfunding feasibility. This research substantiates the potential of crowdfunding and crowdfund investing to emerge as instrumental mechanisms for bolstering entrepreneurship, innovation, and economic progress. This exploration serves as a foundational stride toward harnessing the transformative power of crowdfunding while concurrently paving the way for its responsible and effective adoption in Egypt.