Crowdfunding has taken off globally and has recently begun to gain traction in Africa in particular, because of the opportunities it gives individuals or businesses looking to raise awareness and funds for their innovative ideas and products.
On that note, the African Crowdfunding Platform Event was held in Mauritius on Monday 22 July 2019 at the Hennessy Park Hotel in Ebène, co-hosted by the Mauritius Africa FinTech Hub (MAFH), Crowdfunding platforms Fundkiss and Olive Crowd, and the African Crowdfunding Association.
With an event of this nature and scale taking place for the first time in Mauritius, this initiative was welcomed whole-heartedly by attendees of the funding/investment, entrepreneurship, start-up and FinTech communities in Africa.
The event increased awareness about Crowdfunding platforms as an alternative funding/investment instrument in Africa. It also served as an exciting opportunity to learn more about the various Crowdfunding platforms that exist.
Moreover, it highlighted the benefits and the importance of Crowdfunding platforms in terms of equity, funding, regulations and compliance, especially for young entrepreneurs and SMEs.
The need for more such initiatives was clearly evidenced as the event was attended by over 90 participants, eager to learn more about Crowdfunding on the eve of its becoming a new licensable activity in Mauritius, as announced in the recent National Budget.
Several speakers including the Chief Executive Officer, Mauritius Africa FinTech Hub (MAFH), Michal Szymanski; Co-Founder/Director, Fundkiss Technologies, Paul Perrier; Director, Olive Crowd, Dhitoimaraini Foundi and CEO and Co-founder, Lelapafund and Director and Regulations Lead, African Crowdfunding Association, Elizabeth Howard, shared their insights on this path-breaking innovation.
Speaking at the conference, CEO of MAFH, Michal Szymanski said: “This event is happening at the right time, as it introduces new and different funding models to supplement venture financing, as acknowledged by the government of Mauritius in Budget 2019-20 through recognition of Crowdfunding as a new licensable activity. Given its applicability to emerging markets, Crowdfunding is going to transform the entrepreneurial landscape in Africa and give a huge boost to investment and innovation within the continent.”
Michal also added, “MAFH is particularly excited about the Crowdfunding initiatives that have already been launched in Mauritius. We are also looking forward to supporting our members Fundkiss and Olive Crowd, who have already launched their platforms in Mauritius; and supporting our other members in leveraging funding opportunities that Crowdfunding presents. There is a need to be present at grass root level, to understand people’s realities and needs. We believe in African solutions, African money for African products.”
Also, Co-founder, Fundkiss, Paul Perrier said, “The objective of this event was to create awareness of Crowdfunding and the models within. For instance, we have Small Step Matters, a donation-based Crowdfunding platform, which has been in operation for the last two years. My own entity, Fundkiss, has been in operation since August 2018 and specialises in SME lending. The idea is to bring all stakeholders in Crowdfunding in Mauritius and Africa so we can all build a sustainable industry across the continent.”
Paul went on to note, “The ultimate objective is to bring legitimacy to a new vertical which is part of the FinTech industry that the government is trying to promote. At Fundkiss, we were pioneers in Crowdfunding as far back as in 2017 and it was through the regulatory sandbox that we received the licence to operate in Mauritius, as the first Crowdfunding platform to do so. Three years ago, when we started the process, nothing existed. Through dialogue with the authorities, we have now reached a stage where awareness of this industry has increased in leaps and bounds with pioneering events such as the current one being held.”
Director, Oliver Crowd, Dhitoimaraini Foundi, said, “We are holding this event to democratise Crowdfunding and gain further credibility for this method of funding, which is especially pertinent for SMEs. We need to make investment more accessible in terms of pitching for financial inclusion. Unfortunately, the system is not known too well so far in Mauritius. There is an obligation on sector experts to train people and help them to understand and adapt to these new and innovative funding mechanisms.”
He also added, “It takes on an average 45 days for enterprises to raise funds on our platform at Olive Crowd, for instance. Thus, equity Crowdfunding has several advantages such as regular contact between enterprises and investors, backed by expert follow-up for efficient management of funds.”
Crowdfunding in Africa today represents less than 0.1 percent of global Crowdfunding activity, although its potential market size is measured at US$2.5 billion in 2025.
In this context, promoting Crowdfunding regulations across Africa – albeit a complex task in view of each jurisdiction posing a different set of challenges – is expected to facilitate cross border payments and to set the foundation for the regulator to oversee transactions.
CEO and Co-Founder, Lelapafund and Director and Regulations Lead, African Crowdfunding Association, Elizabeth Howard, hosted a closed session for African regulators after the main conference.
Elizabeth said, “The African Crowdfunding Association has today launched the ACfA Label Framework, a pan-African regulatory framework for securities-based Crowdfunding, at this event organised in collaboration with the MAFH where we brought together representatives of regulatory authorities from eight African countries. Once implemented by ACfA and participating African regulators, ACfA will supervise the operations of Crowdfunding intermediaries and enforce the Framework.”
On the genesis of ACfA, she added, “Our experience in France showed us how complicated it was to fund SME projects in Africa using a framework imported from France. We realised that we needed an African framework for African projects, and decided to undertake the work required for that to happen. That is when the idea of the African Crowdfunding Association came about, and the need for a self-regulatory framework for Crowdfunding in Africa that is to be developed and enforced by market practitioners, in close collaboration with African regulatory authorities.”