Equity Crowdfunding in Africa: How Can Investment Micro-Behaviors Make the Crowdfunding Macro-System Work?

Abstract

Equity crowdfunding offers a wide audience – the crowd – the possibility of financing a business project by choosing the beneficiary in accordance with the positive impact of the investment on society or the environment. This new funding mode may be located between venture capital and microcredit. In Africa, the phenomenon is embryonic but could find its place in the microfinance system since it is based on the widespread traditional model of “tontines.” We first observed the crowdfunding platforms dedicated to Africa and conducted interviews in Gabon with microfinance institutions and small business owners. This empirical work then led us to mobilize new institutional theory to suggest a conceptual broadening of the participatory financing system, with a view to enhancing local economic development in Africa.