A critical analysis on the potential of crowdfunding platforms as alternative real estate financing techniques.
Nassaka, Sherinah Kasozi
MetadataShow full item record
The real estate industry is associated with a heavy capital requirement and yet it still remains one of the most promising fields of investment both in Uganda and worldwide. Mortgages being the most popular mode of financing for real estate in Uganda indicates the economy’s reliance on traditional financing techniques whereas it is viewed as unstable due to the volatility of interest rates among other issues. Therefore, this study critically analyzes the potential an alternative financing tool for a low-wage economy like Uganda, real estate crowdfunding. The research assesses the performance of the case study, Bit Bricks, a real estate crowdfunding platform in Uganda, the knowledge and attitudes towards the crowdfunding industry in Uganda as well as the standing of these platforms in comparison with other existing real estate financing tools. The study adopted a qualitative research approach where questionnaires were distributed to participants of the platform case study, Bit Bricks and an interview conducted with the platform’s proprietor. The study found that unlike previous studies, the incorporation of social media into the RCPF industry is in fact a hurdle to the growth of the platform in developing countries like Uganda as it brings about skepticism, it further found that brand reliability is a big determinant of the success of the project. The study also found that in comparison to other financing tools, crowdfunding is viewed as more affordable and yet it faces a problem of accessibility due to the infancy of the industry. It further presented that the key performance indicators include; delivering homes that people will accept, delivering return with interest and dividends to both shareholders and debt investors. As far as performance goes, the study found that the case study’s success was promising as two out of the three key performance indicators had been satisfied. The regulatory framework also plays a crucial role in the success of the platforms