The state of crowdfunding in Africa and its potential impact: a literature review

Abstract

The purpose of this review is to shed light on the current state of crowdfunding and its possible effects on African communities. The goal of this article is to give a narrative overview of how crowdfunding has evolved, along with trends, challenges, and potential effects on African communities. Despite recent advancements in the usage of mobile technology on the continent, the growth of crowdfunding based on internet platforms has been quite gradual. According to research, the success of crowdsourcing initiatives in Africa depends on a hybrid strategy that involves the "offline" network of backers. The majority of research concluded that the biggest barriers to the growth of crowdfunding in Africa were a lack of knowledge and trust in public institutions, lax laws protecting the rights of backers and ensuring transparency, as well as technology (internet connection). Also mentioned was the possibility that significant cultural aspects of offline crowdfunding, if taken into consideration, would make it easier for African business owners to adopt the practice. It has lagged behind other continents in the use of crowdfunding to raise money for small businesses or individuals, which could also help with financial inclusion in Africa, either directly for individuals or by sponsoring small enterprises. It is necessary to have a regulatory framework that promotes technological advancement while also reducing crime and fraud. Additionally, establishing platforms based on continents and creating synergies with existing financial actors would raise awareness, boost confidence, and whet interest in using them.

Keywords: {'name': 'Crowdfunding'}, {'name': 'Africa'}, {'name': 'Financial inclusion'}, {'name': 'funding'}, {'name': 'small business'}

Authors & affiliations

Bouba Ismaila
Affiliation not supplied

Deposited references

Supplied references, not a list of publications citing this article.

About M-Changa. (2023, January 18). M-Changa Africa. https://www.mchanga.africa/about/

About Thundafund. (2022). Thundafund.Com. https://blog.thundafund.com/how-does-thundafund-work/about/

DOI: 10.18326/muqtasid.v12i1.17-31

DOI: 10.4236/ojbm.2021.92031

DOI: 10.1111/jems.12093

DOI: 10.1007/978-981-10-1727-8_3

DOI: 10.1007/978-981-10-1727-8_3

DOI: 10.1007/978-3-030-46309-0_14

Chironga, M., De Grandis, H., & Zouaoui, Y. (2017). Mobile financial services in Africa: Winning the battle for the customer. McKinsey & Co. https://www.mckinsey.de

Coetzee, J. (2013). Africa’s Crowdfunding Context: Starting up Startups the African Way. https://ventureburn.com/2013/07/africas-crowdfunding-context-starting-up-startups-theafrican-way/

Ghane, S., Fathian, M., & Gholamian, M. R. (2011). Full relationship among e-satisfaction, e-trust, e-service quality, and e-loyalty: The case of Iran e-banking. Journal of Theoretical and Applied Information Technology, 33(1), 1–6. http://www.jatit.org/volumes/Vol33No1/thirtythird_volume_1_2011.php

Gibbons, C. A. (2022). Equity Crowdfunding Economic Growth in African Countries: A Framework. Case Western Reserve Journal of International Law, 54(1), 447.

DOI: 10.2139/ssrn.2269242

Hiller, A. (2017). An empirical analysis of crowdfunding in Sub-Saharan Africa. Leipzig Graduate School of Management.

How does Thundafund work. (2023). Thundafund.Com. https://blog.thundafund.com/how-does-thundafund-work/

DOI: 10.1002/jsc.2120

DOI: 10.4314/ft.v8i1.8

DOI: 10.1016/j.intman.2015.03.004

DOI: 10.1007/s13132-022-01062-2

DOI: 10.1017/S0003055410000201

DOI: 10.4102/jef.v5i1.305

Maso Mankunku, L., & Muroi, T. (2019). Crowdfunding, nouvelle alternative de financement des PME, avantages et perspectives: Cas du Maghreb (Maroc, Tunisie, Algérie) [Master’s dissertaion]. Université Mouloud Mammeri.

Modeste, A. A., & Fouda, M. (2018, May). Le crowdfunding à l’expérience de la culture africaine. Conference: 7eme Journée Doriot, Montreal.

Munyanyi, W., & Mapfumo, A. (2018). Factors influencing crowdfunding plausibility in post hyperinflationary Zimbabwe. International Journal of Contemporary Applied Researches, 5(10), 99–111.

Ngcobo, L., & Chisasa, J. (2018). Success factors and gender participation of stokvels in South Africa. Acta Universitatis Danubius. Œconomica, 14(5). https://www.ceeol.com/search/article-detail?id=734297

DOI: 10.2139/ssrn.3053771

Olafusi, T. A., Ishola, A. R., Abimbola, B. T., & Idowu, O. J. (2022). Development of SMEs in Africa: The Role of Crowdfunding. International Journal of Entrepreneurship, 26(5).

DOI: 10.57229/2373-1761.1420

DOI: 10.1007/s10668-022-02451-y

DOI: 10.58205/mjrs.v7i2.1046

DOI: 10.1016/j.jretai.2012.03.001

DOI: 10.3917/edd.261.0005

Sabah, S., & Hidayat, B. (2021). Le crowdfunding: Un outil de financement pour les startups en Algérie The Crowdfunding: A funding tool for startups in Algeria. Etudes Economiques, 21(2), 448–461.

Soreh, W. C. (2017). Awareness and attitude towards Crowdfunding in Nigeria. International Journal of African and Asian Studies, 36, 1–8.

Tadjousti, H., & Jaouad, Z. (2022). Crowdfunding et dynamisation de l’innovation au niveau des territoires: Les enseignements tirés de l’expérience marocaine. Alternatives Managériales Economiques, 4(1), 203–223.

Tekfi, S. (2018). Caractéristiques et fonctionnement du Crowdfunding au Maghreb. Revue Marocaine de Recherche En Management et Marketing, 10(2), 189–206.

Thecrowddatacenter (2022a). Nigeria, Federal Republic of. https://www.thecrowdfundingcenter.com/data/places?location=NG

Thecrowddatacenter (2022f). South Africa, Republic of. https://www.thecrowdfundingcenter.com/data/places?location=ZA

Thecrowddatacenter (2022e). Kenya, Republic of. https://www.thecrowdfundingcenter.com/data/places?location=KE

Thecrowddatacenter (2022b). Rwanda, Republic of. https://www.thecrowdfundingcenter.com/data/places?location=RW

Thecrowddatacenter (2022d). Burundi, Republic of. https://www.thecrowdfundingcenter.com/data/places?location=BI

Thecrowddatacenter (2022c). Tanzania, United Republic of. https://www.thecrowdfundingcenter.com/data/places?location=TZ

Vries, M. (2019). Crowdfunding for Start-up Financing in Kenya, South Africa & Uganda.

Yasmine, D., & Hadjer, M. (2022). Crowdfunding, l’un des solutions de financement (Étude d’état des plateformes du crowdfunding Algériennes) Crowdfunding, one of the financing solutions. Revue Le Manager, 9, 427–453.

Yatabary, A. (2015). Quel est le rôle des femmes africaines dans le développement. Communication à l’occasion d’une Table Ronde à Laquelle j’étais Invitée Sur Ce Sujet. http://aichayatabary.over-blog.com

DOI: 10.1002/pa.1921