CROWDFUNDING AS APPLIED IN DEVELOPING COUNTRIES.

Is Crowdfunding applicable to the third world? Read this article to learn more how it has been applied the developed world.

Crowdfunding refers to the practice of raising funds from a large number of people, typically via the internet, to support a particular project or initiative. In developing countries, crowdfunding has emerged as a popular way for entrepreneurs, artists, and other creative individuals to secure funding for their projects, especially when traditional funding sources are limited or inaccessible.

One of the main advantages of crowdfunding in developing countries is that it can help to democratize access to capital. By leveraging the power of social media and online platforms, entrepreneurs and other individuals can reach a wider audience of potential investors, regardless of their geographical location. This can be especially beneficial in countries where access to traditional forms of financing, such as bank loans, is restricted due to factors such as high interest rates or a lack of collateral.

Moreover, crowdfunding can also serve as a valuable tool for promoting economic development and social change in developing countries. By providing a means for people to support projects that align with their values and aspirations, crowdfunding can help to foster innovation, entrepreneurship, and community development. For example, crowdfunding campaigns have been used to fund initiatives such as community-based healthcare programs, renewable energy projects, and small business ventures.

However, there are also challenges associated with crowdfunding in developing countries, including issues related to infrastructure, access to technology, and regulatory frameworks. In some cases, the lack of adequate online payment systems or reliable internet connectivity can limit the effectiveness of crowdfunding campaigns. Additionally, regulatory barriers such as restrictions on foreign investment or limited legal frameworks for crowdfunding can pose challenges to the growth and sustainability of crowdfunding in developing countries.

Overall, while crowdfunding offers significant potential as a tool for supporting development and innovation in developing countries, careful attention must be paid to the specific challenges and opportunities associated with this approach in each context.

Crowdfunding has become increasingly relevant in developing countries like Kenya, Nigeria, and South Africa as a means of supporting entrepreneurship, social innovation, and community development. Below are some examples of how crowdfunding has been used in these countries:

1. Kenya: In 2013, a Kenyan tech startup called BRCK launched a crowdfunding campaign on Kickstarter to develop a rugged, portable Wi-Fi device designed for use in remote or low-resource settings. The campaign raised over $170,000 from more than 1,100 backers, demonstrating the potential for crowdfunding to support innovative technology projects in Kenya and other developing countries.

2. Nigeria: In 2015, a Nigerian filmmaker named Niyi Akinmolayan launched a crowdfunding campaign on Indiegogo to finance the production of a feature film called "The Arbitration." The campaign raised over $50,000 from more than 400 backers, demonstrating the potential for crowdfunding to support creative industries and independent artists in Nigeria and other African countries.

3. South Africa: In 2016, a South African entrepreneur named Ludwick Marishane launched a crowdfunding campaign on Thundafund to support the development of a low-cost, waterless bath product designed for use in areas without access to running water. The campaign raised over $21,000 from more than 100 backers, demonstrating the potential for crowdfunding to support social entrepreneurship and sustainable development in South Africa and other developing countries.

In addition to these examples, crowdfunding has also been used in developing countries to support a range of other initiatives, including healthcare projects, renewable energy initiatives, and small business ventures. Overall, crowdfunding has emerged as an important tool for supporting development and innovation in these countries, and is likely to continue to play a key role in supporting the growth and sustainability of entrepreneurship and social innovation in the years to come.

Here are some tips for underdeveloped African countries on the application of crowdfunding in relevant development projects:

1. Identify the right platform: Choose a crowdfunding platform that is well-suited to your specific project and target audience. There are many crowdfunding platforms available, so it is important to do your research and choose one that has a strong track record of success and is well-known in your community or industry.

2. Build a strong campaign: A successful crowdfunding campaign requires a compelling story and a clear, concise message that resonates with potential backers. Make sure that your campaign is well-planned, with clear goals, timelines, and rewards for backers.

3. Leverage social media: Social media can be a powerful tool for promoting your crowdfunding campaign and reaching a wider audience. Make sure to leverage platforms like Facebook, Twitter, and Instagram to promote your campaign and engage with potential backers.

4. Engage your community: Crowdfunding is not just about raising money – it is also about building relationships and engaging your community. Make sure to engage with your backers throughout the campaign and beyond, and provide regular updates on your progress and milestones.

Be transparent and accountable: Backers want to know that their contributions are making a difference. Make sure to be transparent about how you are using the funds you raise, and be accountable for your actions and outcomes.

5. Consider partnering with local organizations: Partnering with local organizations can help to amplify the impact of your crowdfunding campaign and increase your reach within the community. Look for organizations that share your goals and values, and explore ways to collaborate on your project.

By following these tips and best practices, underdeveloped African countries can harness the power of crowdfunding to support development projects and promote entrepreneurship, innovation, and social change in their communities.

In conclusion, crowdfunding has emerged as a powerful tool for supporting development and innovation in developing countries, particularly in Africa. By leveraging the power of social media and online platforms, crowdfunding has democratized access to capital and provided a means for entrepreneurs, artists, and other creative individuals to secure funding for their projects.

From Kenya to Nigeria to South Africa, crowdfunding has supported a wide range of development projects, including innovative technology solutions, creative industries, and social entrepreneurship initiatives. However, to fully realize the potential of crowdfunding in Africa, careful attention must be paid to the specific challenges and opportunities associated with this approach in each context.

By building strong campaigns, leveraging social media, engaging with communities, and partnering with local organizations, African entrepreneurs and organizations can harness the power of crowdfunding to support development projects and promote positive change in their communities.

Overall, the potential of crowdfunding to support development and innovation in Africa is vast, and is likely to play an increasingly important role in shaping the future of the continent. As such, it is important for policymakers, investors, and entrepreneurs to work together to promote the growth and sustainability of crowdfunding in Africa, and to explore new and innovative ways to harness the power of this tool to support development and positive change.

Here are some reference literature where one can read about crowdfunding:

1. "The Crowdfunding Bible" by Scott Steinberg This book is a comprehensive guide to crowdfunding, covering everything from the basics of launching a campaign to advanced strategies for maximizing results. It is a great resource for entrepreneurs, investors, and anyone interested in crowdfunding.

2. "Crowdfunding: The Corporate Era" by Steven Dresner This book explores the role of crowdfunding in corporate finance and innovation, providing insights into the ways in which large corporations are using crowdfunding to support their growth and development.

3. "Crowdfunding for Social Good" by Devin Thorpe This book focuses on the use of crowdfunding to support social entrepreneurship and social change initiatives. It provides practical advice and case studies on how to launch successful crowdfunding campaigns for social good.

4. "The JOBS Act: Crowdfunding for Small Businesses and Startups" by William Michael Cunningham This book is a comprehensive guide to the JOBS Act and the crowdfunding provisions contained therein. It provides practical advice and insights for small businesses and startups looking to take advantage of the new crowdfunding regulations.

5. "Crowdfunding Intelligence: The No-Nonsense Guide to Raising Investment Funds on the Internet" by Dr. David Kuo Chuen Lee This book is a practical guide to crowdfunding, covering everything from the basics of launching a campaign to advanced strategies for building a successful campaign. It is a great resource for entrepreneurs, investors, and anyone interested in crowdfunding.

These books offer a range of insights and perspectives on crowdfunding, and can be a great resource for anyone looking to learn more about this exciting and rapidly-evolving field.

If you want to learn more about various forms of funding click here.