CROWDFUNDING IN SUB-SAHARAN AFRICA: DIFFERENCES IN BORROWERS' PROFILES BASED ON ETHNICITY, COLONIAL HERITAGE AND ECONOMIC DEVELOPMENT

In the last decade, online loan-based crowdfunding has been subject to attention by researchers as a promising way to fostering entrepreneurship. We describe in this paper the state of the loan-based crowdfunding phenomenon in... [ view full abstract ]

In the last decade, online loan-based crowdfunding has been subject to attention by researchers as a promising way to fostering entrepreneurship. We describe in this paper the state of the loan-based crowdfunding phenomenon in Africa, with a particular focus on Sub-Saharan Africa, looking at data from the Kiva platform. Our analysis takes into account the contextual differences which exist in SSA in terms of ethnic diversity, colonial heritage and economic development. The data suggest that countries with more ethnic diversity will have less loan requests than countries with less diversity; that borrowers from English speaking countries borrow higher amounts than those from French speaking countries and, finally, that borrowers from more developed countries preferred to use crowdfunding to finance projects in retail and education while those in poorer countries use it for agriculture. This study draws on the existing literature on crowdfunding.