The first crowdfunding digital platform in Colombia
In an increasingly interconnected world, social networks and platforms have become an important tool for fundraising. By leveraging social media platforms people and companies can crowdfund their ideas. The Colombian Stock Exchange has launched an online crowdfunding platform called a2censo. It targets startups, as well as small and medium enterprises, looking for alternative financing methods.
By launching the first regulated crowdfunding digital platform in Colombia, the Stock Exchange offers new investment possibilities for small projects or full blown SMEs.
Get comprehensive access to global crowdfunding business, stock market, finance news, and trending topics with the Born2Invest companion app.
The Colombian stock exchange launches a new platform
Over the years, the stock market has been perceived as something reserved for large investors. This perception might be about to end now that the Colombian Stock Exchange (BVC) has provided Colombians with their first collaborative financing platform, or crowdfunding platform. It is 100% digital and monitored by the Government.
The tool was created to allow for, and provide a broader audience with greater investment opportunities, and SMEs with a broader range of options to acquire financing. In the long run, the a2censo tool will help companies to grow without needing to go through institutional investors.
With an investment of only $200,000, any given person will have the opportunity to invest in high potential innovative business initiatives, with a return potentially superior to that of existing alternatives that are currently available.
The first option will be debt financing for SMEs, however, the stock market expects the platform to evolve and move towards issues such as discounting invoices or financing ventures and is also considering gradually reducing investment amounts to $50,000.
How does this digital platform works
Crowdfunding is based on the concept of a “cow”. In other words, a collective saving for a specific project: a trip or a purchase. This is usually done by relatives or acquaintances. However, new technologies now allow thousands of people to take part in and access to these activities.
In both Colombia and around the world the tool has been used for a lot for donation support, and some media outlets, such as Noticias Uno or La Silla Vacía, have used this to finance their activities. However, in the case of this particular exchange platform, it is an investment. A 100% digital financial product. The idea for the product is to have people come together to finance and support a productive project that will then return the resources back to them through the terms initially proposed to them.
To get started, the first thing you need to do is to register on the platform as either an investor or as a company. The only requirement that needs to be met is having a savings account already set up from which to transfer your resources. From that point on, you will be given the option to select the type of investment that you prefer set within the different initiatives that look for resources and the interest rate offered includes all costs involved.
Prior validation process
In the situation where a company is seeking funding, the process and company details would first need to go through a review and validation process before this being granted. Additionally, companies will have to pay for the use of the platform on top of which they will need to add the interest that is to be paid to individuals and any commission to the National Guarantee Fund (FNG). The stock exchange is in charge of making sure that the investor has all the information required and available to make their investment decisions.
The stock exchange will take responsibility for assessing the companies risks and finding the best process with which the company can move forward with. Córdoba stated that “The Stock Exchange guarantees that the money that each person puts on the platform will reach the company they are saying and that the conditions agreed between the agents will be met. In addition to this, we make sure that the available information is enough for people to make their investment decisions,”.
The platform initially started with six companies, all of which were looking for resources valued between $140 million and $400 million. Each company will be categorized by sectors and companies include sectors such as agribusiness, biotechnology, electrical energy, process automation, information technology, and telecommunications infrastructure and the profitability will depend on each project type.
The project itself does not seek to replace bank credits but more to offer an alternative or complementary source. A person with $200,000 would most likely only be able to access a savings account that would give them between 2% and 4%, whereas an SME currently only has the option borrow at rates above 16%.
Entities such as Innpulsa, CAF and the IDB, among many others, all participated in the financing of the project which started nearly two years ago, the project fully complies with current regulations for this type of initiative and is under the supervision of the Financial Supervisor.
Córdoba concluded that “It is not the only platform, nor do we want it to be. This is the contribution of the Bolsa to create a digital financing ecosystem for the country’s entrepreneurship and companies, as well as to create new investment options,”.
(Featured image by stevepb via Pixabay)
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in Dinero, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
The US Equity Crowdfunding Platform WeFunder Launches in Europe
Unlike the other platforms, WeFunder has taken a "soft" approach compared to, for example, Republic's $100 million acquisition of Seedrs,...
Nigeria CBDC Adoption Rises as Fiat Currency Shortage Grips Country
Overall, the introduction of eNaira in Nigeria is a significant step towards modernizing the country's financial system and promoting financial...
Markets Bobbled Last Week but Appear Poised to Move Lower
The banking crisis continues with the potential collapse this past week of Deutsche Bank. DB is in the category of...
Stock Market Goes Nowhere Fast, as Gold Approaches a New All-Time High
The Dow Jones former support at 32,500 became a line of resistance this week. On Tuesday the Dow Jones closed...
The TopRanked.io Weekly Digest: What’s Hot in Affiliate Marketing [Week 12]
Empires come in all shapes and sizes, from small upstart affiliate businesses right through to world-dominating empires like TikTok. And...
Featured2 weeks ago
Rice Demand for Exports Was Slow to Moderate
Crowdfunding4 days ago
Concrete Investing Launches €4.75 Million Crowdfunding Campaign
Mining & Energy2 weeks ago
With the Copper Crunch Still Looming, Keep an Eye on Trigon Metals
Biotech6 days ago
Arthex Biotech Raises €11 Million to Advance Against Muscular Dystrophy