The Rise of Crowdfunding as a Source of Entrepreneurial Finance in Africa: Review of Determinants and Challenges

Given Africa’s resource scarcity, the rapid growth of crowdfunding as an alternative entrepreneurial financing mechanism for start-ups often excluded from traditional financing systems is essential. This chapter reviews the key determinants and challenges influencing crowdfunding across the continent. It explores how technology and digital connectivity, social capital, and institutional environments shape crowdfunding adoption and efficacy. The discussion underscores the importance of entrepreneurs’ strategic use of multimedia and social capital in positively influencing crowdfunding across the different models while acknowledging the barriers that hinder crowdfunding, including weak regulatory frameworks and limited financial knowledge. While crowdfunding is promising for promoting inclusive entrepreneurship, its sustainability depends on a robust and agile ecosystem. This chapter calls for policies to enhance transparency and trust through blockchain, positioning crowdfunding as a crucial driver of entrepreneurial development and financial inclusion in Africa