Crowdfunding: Genesis and Comprehensive Review of Its State in Africa

Abstract

In developing countries, the topic of crowdfunding is still in its infancy because Europe; Asia and North America have monopolized almost all the researchers’ attention. Nevertheless, the number of scholars stressing the fact that investigations should be conducted on the economic impact of crowdfunding in developing countries where financial systems are still struggling is incredibly increasing. But before getting to that point, as Gajda and Walton stated, “An analysis of primary and secondary data; in-depth assessment of live projects and statistical analysis could provide more insight (…) how to make crowdfunding more accessible to entrepreneurs in the developing world” (Gajda & Walton, 2013: p. iii). Drawing on this and the fact that none of the extant literature about crowdfunding in Africa has provided statistical assessment of existing platforms on the continent; how much crowdfunding has been adopted and sustainably implemented across various region on the continent, this paper’s main goal is to depict and describe the current situation of crowdfunding in Africa. Known as proven and accepted methods used for growing topics in the field of entrepreneurship, this paper used exploratory and descriptive methods. This paper provides everyone in need of clear understanding of crowdfunding’s origin; how it evolved; its level of penetration and use in Africa, with the necessary information. The study came to conclude that in West and North Africa only 22% and 33% of the platforms created in the span of 2012 to 2020 are still operating. East Africa and South Africa are doing far better as respectively 70% and 55% of their crowdfunding platforms are still operating. The study also found that French Speaking countries struggle a lot in implementing and sustaining crowdfunding platform. West Africa performs very poorly as rarely the projects listed on the scarce platforms still operating manage to gather more than 2% of their funding goals. The study also came to the conclusion that by May 2020, 64% of the crowdfunding operating in Africa are foreign based.