In 2012, former U.S. President Barack Obama signed the Jobs Act of 2012 and officially introduced equity crowdfunding. Since then, more people have been looking for projects to back in hopes of getting substantial returns. Startup sectors from various countries are booming because of the crowd is drawn into crowdfunding. However, not all regions are ready for this kind of investment just yet.
Forbes Africa’s Victoria Mamora says that Africa isn’t a great place for crowdfunding yet. The region has very limited potential in terms of returns and successes by startups, and as such, investors should shy away from the crowdfunding campaigns in the area, for now at least.
How small is the sector in Africa? In 2015, the global crowdfunding financing was forecasted at $34.4 billion, with 70 percent of the funds stemming from loans. Of the billions accrued in crowdfunding, Africa was responsible for a measly $24.2 million, which in total is less than one percent of the overall market price.
Despite the small numbers, Africa has the capability to become a great contributor to the sector. A study revealed that over 90 percent of businesses are from small- and medium-sized enterprises (SMEs). Additionally, SMEs are responsible for 80 percent of employment. Crowdfunding, in practice, helps out SMEs with their projects and ventures. With Africa’s business sector being dominated by SMEs, crowdfunding could become a key player in the years to come.
Africa’s crowdfunding industry is still small, but it manages to accomplish feats in an unexpected way. There more crowdfunding campaigns still launching in the continent, but most of them are geared towards helping out individuals.
African crowdfunding success in humanitarian causes
The Independent reports that a crowdfunding campaign launched for the operation of Mhlengi Gwala was a success. The campaign launched on the BackABuddy platform raised over £28,000 in under a day, and according to Gwala’s friend, the 27-year-old athlete underwent surgery successfully and is now recuperating.
According to reports, a gang pulled Gwala from his bicycle as he went up a steep hill. The gang then proceeded to saw Gwala’s right calf, damaging his bones, nerves and a muscle. The attackers also began sawing through Gwala’s left leg before they fled. The triathlete was able to get help from a passing car while he was crawling.
The motive for the attack is still unknown. Apparently, Gwala offered his belongings to the attackers, but they still opted to attack his legs. Fortunately, the crowdfunding campaign was able to help alleviate the expenses from the surgery.
Although the crowdfunding sector in Africa still has room to grow, the recent success it has made with humanitarian causes is a great start. In time, the region will be able to contribute even more to the global crowdfunding financing, and venture capitalists and other investors should keep a close eye on startups in the continent soon.
(Featured image by DepositPhotos)
The TopRanked.io Weekly Digest: What’s Hot in Affiliate Marketing [Buffalo Partners]
First, they came for your college campuses. Then they came for your news, your politics, and you entertainment. And now,...
Redeban Boosts its Leadership in Colombia with the Acquisition of SoyYo
The SoyYo brand will be maintained and enters Redeban's portfolio as one of its strategic units. SoyYo is a recognized...
Why the Growth of Real Estate Crowdfunding in Mexico Slows in 2023
An amount that could make real estate crowdfunding more attractive is 500 million pesos or more. Likewise, he added that...
Biomedical Companies in Spain Demand Tax Incentives for R&D Adapted to the Reality of the Sector
There are many companies in the biomedical sector that, being in the investment or expansion phase, have negative or reduced...
Switzerland Will Probably Legalize Cannabis in the Next Four Years
Switzerland has the advantage that it has already introduced legalization tests in various municipalities. Each test can cover up to...
Crypto2 weeks ago
Bitcoin ETFs Recorded an Impressive January – Straight into the Top 10
Business1 week ago
The TopRanked.io Weekly Digest: What’s Hot in Affiliate Marketing [Discover Cars]
Crypto1 week ago
Bitcoin Breaks $50,000: A New Milestone in the Crypto World
Crypto3 days ago
With Bitcoin ETFs Behind It, BTC Will Rise to $80,000 – Analyst Says