The emergence of crowdfunding in Africa
According to the Afrikstart Crowdfunding in Africa report, crowdfunding platforms in Africa raised $32.3 million for various projects in 2015. Overall market potential in sub-Saharan Africa is estimated at $2.5 billion by the World Bank Infodev by 2025. The practice is rapidly rising in popularity, but in order for to African crowdfunding to flourish further, governments need to develop regulations.
Here are some other key points from the report:
South Africa leads the way
Africa has 57 listed crowdfunding platforms in 2015, all founded and headquartered in Africa. South Africa is the home to most of these platforms – it accounts for over a third of African crowdfunding platforms in 2015. Nigeria comes second, closely followed by Egypt.
Most crowdfunding platforms fund projects within their home countries
Crowdfunding is a new alternative form of fundraising in Africa, so most platforms try to gain foothold and a significant market share within their home nation, before planning wider expansion.
There are only five pan-African platforms
These are Afineety, M-Changa, Pitchoffice, Fundasolva, and real estate platform RealtyAfrica. Afineety started in Morocco, then expanded to Senegal and Ivory Coast. The Nigerian crowdfunding platform Funda Solva listed 2 projects from Cameroon and Ghana. Kenyan platform M-Changa is expanding in Tanzania.
31.5 percent of Africa-based crowdfunding platforms specialised in promoting projects related to social causes
The second most favoured category was business and entrepreneurship (21 percent), then creative and innovative projects (17.5 percent). New project categories that emerged in 2015 include renewable energy, healthcare, and education.
Various causes fuel the popularity of crowdfunding
According to the report, crowdfunding in Africa is fuelled by a real market need of alternative source of financing, the expansion of mobile technology, the rise of a middle class, and the active contribution of the African Diaspora.