The Persuasive Power of Signals: How Narratives, Fundraising Model, and Number of Borrowers Drive Success in Lending-Based Prosocial Crowdfunding

Crowdfunding has emerged as a significant alternative financing source, drawing the attention of scholars, practitioners, and policymakers. This study examines the success factors in lending-based prosocial crowdfunding (LBPSC), a model that integrates economic objectives with social impact. Drawing on signaling theory, we examine how the interplay of multiple signals, narrative framing, fundraising models, and borrower counts influences the success of campaigns. Our analysis of the Kiva platform provides empirical support for our theoretical claims and deepens understanding of the LBPSC phenomenon. Our findings also provide practical guidance for entrepreneurs and policymakers to design more effective crowdfunding campaigns.