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The Determinants of Reward-Based Crowdfunding Success in Africa

Author

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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)

  • Athenia Bongani Sibindi

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

  • Ntwanano Jethro Godi

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

Abstract

This study focused on investigating the factors that drive reward-based crowdfunding in Africa, particularly considering the increasing limitations that entrepreneurs face in accessing traditional financial resources globally, by analysing 215 crowdfunding projects from prominent platforms like Kickstarter, IndieGoGo, and Fundraised. The research aimed to identify the key drivers of crowdfunding success. The results from an econometric logistic regression analysis revealed that while images, longer campaign durations, and videos positively influenced crowdfunding, they did not significantly contribute to achieving success. In contrast, the number of backers showed a positive and significant impact on outcomes, whereas the targeted funding amount negatively influenced the success. Notably, the presence of spelling errors was found to have a positive, though statistically insignificant, relationship with crowdfunding success. These findings enhance the existing literature on crowdfunding and offer valuable insights into concepts such as information asymmetry and signalling theory within the context of reward-based crowdfunding.

Suggested Citation

  • Lenny Phulong Mamaro & Athenia Bongani Sibindi & Ntwanano Jethro Godi, 2025. "The Determinants of Reward-Based Crowdfunding Success in Africa," Risks, MDPI, vol. 13(5), pages 1-16, May.
    • Handle: RePEc:gam:jrisks:v:13:y:2025:i:5:p:94-:d:1654159
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    References listed on IDEAS

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    1. Yan Xu & Jian Ni, 2022. "Entrepreneurial Learning and Disincentives in Crowdfunding Markets," Management Science, INFORMS, vol. 68(9), pages 6819-6864, September.
    2. Bashir Ahmed Maow, 2021. "The Impact of Small and Medium Enterprises (SMEs) on Economic Growth and Job Creation in Somalia," Journal of Economic Policy Researches, Istanbul University, Faculty of Economics, vol. 8(1), pages 45-56, January.
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