Crowdfunding has emerged as a prominent alternative source of financing, with lending-based prosocial crowdfunding (LBPSC) offering unique advantages to borrowers, investors, and society as a whole. This study examines LBPSC through the lens of signaling theory, identifying key factors that drive campaign success. Specifically, it highlights the role of project narratives, focusing on the "how" and "why" elements as critical signals influencing outcomes. Additionally, the study explores how the funding model and the number of borrowers impact the effectiveness of these narratives. Using data from the Kiva platform, the analysis provides empirical evidence supporting these theoretical insights. The findings contribute to a deeper understanding of LBPSC and offer practical guidance to entrepreneurs and policymakers for designing more impactful crowdfunding campaigns.
