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Determinants of Crowdfunding Success in Africa: An Exploratory Perspective on Incentive Rewards and Beyond

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  • Lenny Phulong Mamaro

    (Department of Finance Risk Management and Banking, University of South Africa (UNISA), P.O. Box 392, Pretoria 0003, South Africa)

Abstract

This study aims to determine the role of reward incentives in crowdfunding success in Africa. Reward incentives seem to play an essential role in the success of a crowdfunding project. Therefore, understanding how distinct types of incentive rewards influence the backer’s engagement and viability of crowdfunding campaigns is essential. Drawing from secondary cross-section data from Kickstarter and Indiegogo, this research uses the probit regression method to analyse and test the hypotheses. The findings revealed that flexible funding negatively influences a crowdfunding campaign, diminishing the probability of success. In contrast, a more significant number of backers positively affects a crowdfunding campaign, boosting its chances of success. Rewards promised to potential backers increase the probability of success. These findings influence how crowdfunding campaigns are launched, allowing them to build and achieve their financing targets. The findings provide knowledge that entrepreneurs could develop far more attractive, culturally appropriate reward schemes to boost their crowdfunding campaigns’ chances of success. It provides a valuable understanding regarding the potential of crowdfunding as an alternative tool for economic development in Africa among policymakers and development agencies. Lastly, it adds to the limited literature on crowdfunding in Africa, especially within the context of reward incentives, and provides a foundation for further studies in this area.

Suggested Citation

  • Lenny Phulong Mamaro, 2025. "Determinants of Crowdfunding Success in Africa: An Exploratory Perspective on Incentive Rewards and Beyond," JRFM, MDPI, vol. 18(9), pages 1-20, August.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:9:p:478-:d:1733584
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    References listed on IDEAS

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    1. Zhang, Xing & Wang, Xinyue & Wang, Durong & Xiao, Quan & Deng, Zhaohua, 2024. "How the linguistic style of medical crowdfunding charitable appeal influences individuals' donations," Technological Forecasting and Social Change, Elsevier, vol. 203(C).
    2. Francesco Cappa & Federica Rosso & Darren Hayes, 2019. "Monetary and Social Rewards for Crowdsourcing," Sustainability, MDPI, vol. 11(10), pages 1-14, May.
    3. Shuangfa Huang & David Pickernell & Martina Battisti & Thang Nguyen, 2022. "Signalling entrepreneurs’ credibility and project quality for crowdfunding success: cases from the Kickstarter and Indiegogo environments," Small Business Economics, Springer, vol. 58(4), pages 1801-1821, April.
    4. Lenny Phulong Mamaro & Athenia Bongani Sibindi, 2024. "The Influence of Fixed and Flexible Funding Mechanisms on Reward-Based Crowdfunding Success," JRFM, MDPI, vol. 17(10), pages 1-18, October.
    5. Felix Pinkow, 2022. "The impact of common success factors on overfunding in reward-based crowdfunding: An explorative study and avenues for future research," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 18(1), pages 131-168.
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