Prospects and Challenges of Crowdfunding as an Alternative Funding Option in Nigeria

Abstract

This study aims to review the concept, prospects, and challenges of crowdfunding in Nigeria. Furthermore, it adopts a library-based concept in which secondary sources are relied on data collection using descriptive and deductive approaches of analysis. The results showed that Nigeria has the potential of becoming the hub center of crowdfunding in Africa. However, various challenges are facing the growth of this platform as a means of financing. These include the issues of regulation, lack of adequate awareness, as well as fraud and corruption. Furthermore, this study recommends the need for adequate awareness about crowdfunding and the regulation to ensure its functionality. It also offers additional literature as a means of financing, especially from the Nigerian context.

Empirical investigation of Islamic legal framework, crowd humanitarian funds and poverty reduction in selected Organization of Islamic Cooperation (OIC)

“…The finding of this study is also in consonance with previous studies that buttressed that crowdfunding is compliant with the Islamic legal framework as long as it is devoid of usury (Aderemi et al, 2021). It should be reiterated that there is an advocacy for crowd funding in the middle east (Adbeldayam et al, 2021) as well as considering it as an instrument for carrying out small projects in the Arab world (Amuna et al, 2017); crowd funding is found in the Malaysian regulatory framework (Abdullah, 2016); crowdfunding is an alternative funding in Nigeria (Aderemi et al, 2021) and Africa in general (Hoberg et al, 2017;Amuda, 2022).…”

“…The prime objective of this study was to empirically explore the position of the Shari'ah legal framework in fostering crowdfunding and reducing poverty among members of the Organization of Islamic Cooperation (OIC). Several studies have examined crowdfunding in Western countries and most studies that explored crowd funding through the perspective of Shari'ah were theoretical in nature (Aderemi et al. , 2021).…”

Growing the African Economy Through SMEs: A Consideration for Crowdfunding

“…Hornuf and Schwienbarcher (2016) opined that "double trust dilemma" could arise through the loss of their ideas and replication when they release their innovation to fund providers. Aderemi et al (2021) noted that the exact number of existing crowdfunding platforms in Nigeria is not known but noted twenty-seven crowdfunding platforms obtained by them from an internet survey conducted. These amongst others include 234give, Agropartnership, Comfundme, Donate-ng, FundaEnterprise, Imeela, NaijaFund, and Startcrunch.…”

Qard Hasan as a feasible Islamic financial instrument for crowdfunding: its potential and possible application for financing micro-enterprises in Malaysia

“…Since the past decade, crowdfunding has been on a fast track, serving as an alternative means to raise funds from a large group of people for numerous ideas such as education, start-ups and arts (Ishak, Kamaruddin and Aderemi, 2021). With the means of connecting to thousands of investors through crowdfunding, crowdfunding has also provided a new channel for financing venture capital and social enterprises (Aderemi et al , 2021; Landström et al , 2019; Schwienbacher and Larralde, 2010). Conceptually, there is yet a unanimous definition for crowdfunding.…”

“…Finally, conjoining the fundamental principles of the Shari’ah, the concept of crowdfunding and globalisation and the expansion of technology indicate an avenue to contribute meaningfully to the enrichment of the business ecosystem in Islamic states (Aderemi and Ishak, 2020b). This new financial institution can provide a boundless deal of creativity, flexibility, and high quality by offering numerous products using different Islamic financial instruments such as Mudarabah , Murabahah , Musharakah , Salam , Qard Hasan , Istisna and many more (Ishak, Kamaruddin and Aderemi, 2021).…”