​Reward-Based Crowdfunding in Nigeria: Exploring the Mechanism of Trust

  • Sarah Ordu

Student thesis: Doctoral ThesisDoctor of Philosophy

Abstract

​Crowdfunding has emerged as a transformative financial mechanism, allowing individuals and businesses to gain access to essential financial resources for a variety of endeavours and projects. Reward-based crowdfunding is a type of crowdfunding in which contributors contribute money in exchange for products or services. This form of crowdfunding is growing in popularity in Nigeria because it allows entrepreneurs to access the funds, they need to launch their projects without incurring significant debt. The purpose of this study is to examine the process of reward-based crowdfunding with the objective of understanding how to establish and maintain trust between the three key stakeholders involved in crowdfunding initiatives in Nigeria: entrepreneurs, funders, and administrators of crowdfunding platforms. The research seeks to improve the efficacy and success of crowdfunding initiatives in Nigeria by examining the existing trust dynamics between these parties in depth.
Using relevant theories of trust applicable to developing nations like Nigeria, the study develops an initial framework that is then evaluated and validated via the responses of carefully selected participants. Adopting qualitative techniques, semi-structured, open-ended online interviews are used to collect data for this study in order to gain a comprehensive understanding of the causes of low engagement among the parties involved in crowdfunding processes in Nigeria. The analysis of the gathered data reveals that the initial framework's components have the potential to increase trust and strengthen trust practises in crowdfunding campaigns. In addition, the findings lend credence to the notion that these factors can improve the crowdfunding system's trust-building measures.
​Throughout the research process, additional factors influencing trust dynamics are identified and incorporated. This iterative refinement yields a new conceptual framework that provides a comprehensive mechanism for establishing trust in the context of reward-based crowdfunding in Nigeria. This study contributes to knowledge by identifying and validating trust-building strategies that can have a significant impact on the landscape of crowdfunding, fostering a climate of confidence and cooperation among entrepreneurs, financiers, and crowdfunding platform administrators. This framework equips crowdfunding platforms with a useful tool for nurturing trust and boosting the success of campaigns. Additionally, it can inform the design of policies and regulations that foster the growth of trust in the crowdfunding ecosystem. This research contributes to the advancement of crowdfunding initiatives in Nigeria by cultivating trust, paving the way for more prosperous and successful crowdfunding campaigns and opening new opportunities for economic development and innovation in the country.
Date of Award2023
Original languageEnglish
Awarding Institution
  • Coventry University

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