Digital crowdfunding in Africa

Securing funding is one of the biggest challenges for any start-up company, as banks are traditionally cautious about businesses without proven track records. Seeing this gap in Africa, Edwige Boum founded an online peer to peer crowdfunding platform called Afrikstart. The platform provides easy and affordable access to capital across Sub-Saharan African to entrepreneurs.

Entrepreneurs who seek funding for their businesses have to pitch their projects to an audience of potential backers.

“The campaigns must include a clear description of why they want to raise the money and what they are going to do with it, a video, and images. Entrepreneurs then propose a set of ‘rewards’ for different pledge levels, a funding goal, and a timeframe to raise funds,” says Boum.

Afrikstart then curates the projects and retains a small fee if the crowdfunding campaign reaches its funding goal.

There were 57 active crowdfunding platforms headquartered and operating in Africa in 2015 of which South Africa had 21 portals and Nigeria had nine.

“The total crowdfunding market for Africa-based platforms is estimated at 32.3 million dollars in 2015, which is less than 0.1 per cent of the global crowdfunding activity,” says Boum.

Crowdfunding platforms in South Africa raised about 30.8 million dollars following Egypt with 842,000 dollars raised, then Nigeria with 314,445 dollars raised in 2015.

“Money raised by Africa-based crowdfunding portals was primarily directed to fund start-ups and SMEs by 17.7 million dollars, real estate crowd invested projects by 13.6 million dollars, travel crowdfunded trips by 319,434 dollars, and to donate to social causes and charity projects by 307,860 dollars,” she says.

This project prioritises to fund start-ups and early-stage businesses, more especially young women entrepreneurs from various sectors and industries.

Related Content

Sub-Saharan Africa to suffer 23.1% decline in remittances in 2020 – World Bank

The coronavirus pandemic is leaving migrant workers unable to send money or goods home to families, cutting off a vital lifeline for communities already under siege from a barrage of external shocks.

How COVID-19 impacts access to sustainable energy in SSA

The World Bank says despite accelerated progress over the past decade, the world is expected to fall short of the SDG 7 target. In its just-released 2020 edition of the Energy Progress Report, the World Bank says under current policies, an estimated 620 million people would still lack access to electricity in 2030, and 85 per cent of them will be in sub-Saharan Africa. Makhtar Diop, the Vice President for Infrastructure at the World Bank joins CNBC Africa to discuss the findings of this report.

Launch of Fashionomics Africa Webinar Series

Download logoWhat does the COVID-19 disruption mean for Africa’s Fashion Industry? Opportunities and Threats for Fashionpreneurs and Investors What: Launch of Fashionomics Africa Webinar Series Who: Gender, Women & Civil Society (AHGC) When: Tuesday, 2 June 2020: 10.00 am to 12.00 noon Where: Online The Gender, Women and Civil Society Department of the African Development Bank (www.AfDB.org) Group will launch the Fashionomics Africa Webinar Series of its flagship Fashionomics Af

#LockdownLessons: Companies putting the grit in integrity

As part of our #LockdownLessons series, Bizcommunity (www.Bizcommunity.com) is reaching out to its Press Office clients and South Africa's top industry players to share their experience of the current Covid-19 crisis, how their organisations are navigating these unusual times, where the challenges and opportunities lie, and their industry outlook for the near future. What was your initial response to the crisis/lockdown and has your experience of it been different to what you expecte

Subscribe to our newsletter

Sign up for free newsletters and get more CNBC AFRICA delivered to your inbox

More from CNBC Africa

Land Bank default forces S.Africa’s central bank into $200 mln bailout of state investment arm

JOHANNESBURG (Reuters) - South Africa’s central bank has issued a 3.45 billion rand ($200 million) guarantee to bail out the Corporation for...

Zimbabwe’s Landela agrees to buy state-owned gold mines, seeks more assets

HARARE (Reuters) - Zimbabwe’s Landela Mining Venture has reached agreements to take over and revive four idle state-owned gold mines and is...

How Zimbabwe farmers will be trained how to farm with a scheme from Belarus with love

When the farm invasions were unleashed by the people in power in 2000, it led to bloodshed and random confiscation that reaped a bitter harvest of lost production and exports that persists until this day. That year with all of its fumbling fury fuelled with the idea that to get rich you merely had to own a farm, is always seen as a turning point for the industry. It created a large slice of the country’s GDP and as it fell, so did the fortunes of Zimbabwe.

South Africa’s National Treasury says “no further action” to bailout SAA airline

CAPE TOWN (Reuters) - South Africa’s National Treasury said on Friday there was “no further action” planned to bailout struggling national airline...

Partner Content

Sanlam launches urgent job-preservation initiative in response to COVID-19

Sanlam Investments is responding to the COVID-19 pandemic through large-scale support of the recovery of South African companies, from small enterprises to...

Is Market Volatility Here For The Foreseeable Future?

Content provided by CompareForexBrokers Prior to understanding why market volatility might be here to stay for the foreseeable future,...

Trending Now

Morocco’s RAM to axe routes, may reduce fleet to secure aid

RABAT (Reuters) - Moroccan airline Royal Air Maroc plans to cancel some air links, cut jobs and may sell 20 aircraft to...

Vedanta’s Zambia copper unit warns part of Nchanga open-pit mine about to collapse

LUSAKA (Reuters) - Zambia’s Konkola Copper Mines (KCM), a unit of diversified miner Vedanta Resources, has closed part of its open-pit mine...

Old Mutual makes acting CEO permanent, a year after sacking predecessor

JOHANNESBURG (Reuters) - Old Mutual said on Friday acting CEO Iain Williamson had been made permanent, ending a year of uncertainty over...

South Africa’s Capitec forecasts 70% profit fall in blow to shares

(Reuters) - Capitec Bank forecast a fall of at least 70% in first-half earnings on Friday due to a spike in bad...
- Advertisement -