The Value of Financial Intermediation in African Online Debt Crowdfunding: Evidence from Nigeria

This study investigates the role and effectiveness of financial intermediation in African online debt crowdfunding, using empirical evidence from Nigeria.Drawing on a dataset of 500 loan observations from leading Nigerian crowdfunding platforms, the research evaluates how platform-led screening, interest rate structures, and loan tenors influence loan performanceparticularly default probability.The findings reveal that platform screening significantly reduces default risk and moderates the adverse effects of high interest rates, underscoring the value of algorithmic intermediation in lowtrust, high-risk environments.While risk-based pricing is associated with increased default likelihood, longer loan tenors marginally improve repayment outcomes.These results highlight the importance of contextsensitive intermediation mechanisms in emerging markets, where traditional credit infrastructure is often weak or absent.The study contributes to the literature by demonstrating that digital platforms in Africa are not merely technological innovations but institutional substitutes that enhance credit allocation, investor protection, and financial inclusion.Policy recommendations include strengthening regulatory frameworks, promoting adaptive pricing models, enhancing platform governance, and supporting inclusive access to crowdfunding.The paper concludes by identifying future research directions, including cross-country comparisons, algorithmic fairness, and the integration of crowdfunding with climate finance and Islamic financial instruments.Overall, the study affirms the transformative potential of digital intermediation in reshaping Africa's entrepreneurial finance landscape.