Unable to Get Credit, African Entrepreneurs Turn to Crowdfunding
Thursday, February 12, 2015
Crowdfunding is a way to raise money from a large number of people via the Internet to fund a project. The concept is well established in the West, but is still new in Africa. A World Bank project in Kenya has launched a mentorship program to help business owners take advantage of crowdfunding, which some say could help replace the kind of aid they currently receive from NGOs.
Marion Moon started her organic fertilizer business, Wanda Organic, three years ago; but, like most small-scale African entrepreneurs, Moon found it nearly impossible to find financing for her venture.
So, Moon says, she decided to try something unusual: online crowdfunding.
“Banks will not fund us at this stage, not at all. Friends and family is what has kept us afloat. And that is why crowdfunding became interesting, because it is very difficult to find money at this stage of the business,” she said.
While crowdfunding platforms like Kickstarter or Indiegogo have become popular ways for Western-run projects to get started, they are almost unknown in Africa. In some ways, Moon says, they are not unlike the more traditional ways Kenyans raise money from their communities.
“I think the word ‘crowdfunding’ is new to people, but the idea or the principle of everybody putting in a little bit to help a project, I do not think that is new at all,” she said. “So I think one of the things maybe we could have done better is how we linked what people are used to, to this word ‘crowdfunding.’”