CROWDFUNDING LITERACY AND STARTUP CAPITAL FORMATION AMONG RURAL ENTREPRENEURS IN NORTHERN NIGERIA: EVIDENCE FROM A CROSS-SECTIONAL SURVEY

Access to startup capital remains a significant challenge for rural entrepreneurs, particularly in contexts where conventional financing is constrained by limited collateral, geographical barriers, and restricted access to formal financial services. Crowdfunding offers an alternative digital financing mechanism, but its effective use may depend on entrepreneurs' knowledge, confidence, digital capabilities, and ability to communicate their business propositions. This study examines the relationships between four dimensions of crowdfunding literacy—awareness of crowdfunding opportunities, trust in crowdfunding platforms, digital proficiency, and content presentation skills—and startup capital formation among rural entrepreneurs in Northern Nigeria. The study employed a quantitative cross-sectional survey design and analysed data from 384 rural entrepreneurs using confirmatory factor analysis and structural equation modelling. The measurement model demonstrated acceptable fit, while the structural model also showed satisfactory fit. All four dimensions of crowdfunding literacy were positively and significantly associated with startup capital formation. Awareness of crowdfunding opportunities had a significant positive relationship with startup capital formation (β = 0.29, p = 0.003), as did trust in crowdfunding platforms (β = 0.22, p = 0.019), digital proficiency (β = 0.25, p = 0.012), and content presentation skills (β = 0.35, p = 0.001). Content presentation skills exhibited the strongest standardised association among the four predictors. The findings suggest that the potential contribution of crowdfunding to rural entrepreneurial finance depends partly on entrepreneurs' ability to understand, trust, navigate, and communicate within digital funding environments. The study contributes to the literature by conceptualising crowdfunding literacy as a multidimensional entrepreneurial capability and by integrating the Resource-Based View with Diffusion of Innovation theory to explain its relationship with startup capital formation. The findings have implications for entrepreneurship education, digital financial-inclusion programmes, crowdfunding platforms, and policies aimed at expanding alternative financing opportunities for rural enterprises.