Effect of Crowdfunding Integration on the Market Return of Deposit Money Banks in Nigeria

Author

Ndaman Abdullahi, Juliet Ngozi Ede

Abstract

 This study examines the effect of crowdfunding integration on the market return of Nigerian deposit money banks (DMBs), a research focus necessitated by the transformative shift toward financial technology and digital alternative financing within the Nigerian banking sector. The study adopted an ex-post facto research design, utilizing secondary panel data obtained from the annual reports of listed DMBs on the Nigerian Exchange Group and Central Bank of Nigeria statistical bulletins for the period spanning 2015 to 2024. Data for 100 observations were analyzed using descriptive statistics and panel regression estimation, with the fixed-effects model selected based on the results of the Hausman test. Empirical results from the regression analysis indicate that all three dimensions of crowdfunding integration exert a statistically significant positive influence on the market performance of Nigerian banks. Specifically, increased crowdfunding transaction volume was found to enhance stock returns, acting as a signal of innovation and growth potential to the investing public. Strategic partnerships with crowdfunding platforms emerged as a critical driver for market capitalization growth, reflecting the importance of fintech alliances in boosting firm visibility and investor confidence. Furthermore, income generated from crowdfunding activities significantly strengthens the price-to-earnings ratio, suggesting that revenue diversification through digital channels enhances long-term valuation expectations. The study concludes that crowdfunding integration is a vital strategic tool that positively influences bank valuation and competitiveness in an emerging economy. Based on these findings, it is recommended that Nigerian banks actively expand their crowdfunding transaction volumes and formalize strategic collaborations with fintech platforms to optimize their market performance and attract a broader investor base.

Keywords

Crowdfunding Integration, Market Return, Fintech, Stock Return, Market Capitalization.

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