Religious Expression and Crowdfunded Microfinance Success: Insights from Role Congruity Theory

Crowdfunded microfinance provides financial resources to impoverished entrepreneurs across the globe based on online appeals describing the entrepreneur’s values and venture potential and is considered a key player in the ethical finance movement. Despite knowledge that the content of the appeals impacts funding success, little is known regarding the role of religious expression, which is common and consequential in socially-oriented contexts. We leverage role congruity theory to address a theoretical tension concerning the effects of religious expression on crowdfunded microfinance funding outcomes. Religious expression is associated with perceptions of trustworthiness, rule-following, and ethicality—qualities that would suggest an entrepreneur would likely avoid opportunist behavior and repay the loan. However, appeals to a higher power may be incongruent with the role of an entrepreneur to the extent that such expression communicates a lack of proactiveness and self-reliance. We use a two-study design to help resolve this tension. Our field study incorporating 253,130 loans from Kiva reveals that religious expression negatively influences funding, particularly for women. Our experiment using 1,795 individual loan assessments shows that the negative influence of religious expression is attenuated when individual lenders exhibit higher levels of religiosity. Post hoc analysis suggests campaigns can mitigate the negative impact of religious expression by being careful to also include aspects highlighting an entrepreneurial orientation. Overall, our work extends prior research suggesting that language tied to ethical or virtuous behaviors is generally not rewarded by lenders as using such language may make the applicant appear inconsistent with role of a stereotypical entrepreneur.