When Ronald Van Harten arrived in Kenya from the Netherlands in 2015 he was determined to invest in solar-powered equipment for homes across Africa, make a profit and help the rural poor get energy.
But within two years his company EcoZoom, which sells solar lights, radios, MP3 players and other equipment to some of Kenyas poorest residents, ran into financial difficulties.
The banks were not willing to lend him the capital he needed to stay afloat and loans available from microfinance institutions were too small.
So, like a number of new technology companies seeking to scale up their programmes in Africa, he turned to a crowd funding company.
Few banks if any could finance a social investment project dealing with people seen as high risk group, and even worse banks are expensive and give conditions that are not easy to meet, he told the Thomson Reuters Foundation, referring to high interest rates charged by banks.
TRINE, a Swedish company which raised funds for EcoZoom, has a community of about 1,000 young investors in northern Europe willing to each give a minimum of 25 euros ($27.14) to solar firms which aim to help the worlds poorest.
Using crowd funding, it has raised more than 750,000 euros ($814,200) for 10 renewable energy projects since its launch last year, said Matthew McShane, TRINEs regional manager in East Africa. The firm has invested in countries including Kenya, Zambia, Uganda, Tanzania and Senegal.
In Kenya, EcoZoom received 170,000 euros in February, while 160,000 euros went to Azuri East Africa, part of Azuri Technologies. Two solar micro-grids have also received funds.
The majority of (our) investors can invest in many other ventures in Europe but choose to put their money in social impact projects partly because they want to touch the lives of the poor and partly because returns are slightly higher when compared to … normal investments, McShane said.
The returns are about 6 percent, because of the perceived higher risk associated with this market, he said.
Globally, crowd funding provided $2.1 billion in investment in 2015, and investments in developing countries alone are predicted to exceed $96 billion a year within a decade, according to the World Bank.
It is emerging as an increasingly important means of financing new technology at scale in rural Africa, said Azuri Technologies CEO, Simon Bransfield-Garth.
Unlike microfinance institutions where large investors make many small loans to firms, crowd funding allows many small lenders to provide substantial finance to organisations with the reach and scale to deliver significant impact, he said.
Crowd funding is clearly no longer just for start-ups and has the potential to provide a new class of capital for energy access, Bransfield-Garth said.
Azuri East Africa turned to crowd funding when it wanted to raise cash to help its Kenyan partner, Raj Ushanga House, sell solar panels to 1,200 homes, helping 6,000 people access electricity.
Crowd funding is one of the most progressive and innovative ways of raising money for projects, and relatively unexploited in Africa, said George Wachiuri, a leading Kenyan investment advisor and head of Optiven Ltd, a company based in Nairobi.
“It is a trend we should see grow in Africa in the future, especially when projects impacting the poor are involved, said Wachiuri.
Crowd funding needs to be carried out by specialised firms that are well versed with the concept, he added. One needs a good understanding of how this type of fundraising works to be able to execute it successfully.
TRINE conducts due diligence on a company seeking investment, assessing its business model, supply chain, profit margins and ability to repay, before starting to raise funds.
In East Africa, where it has helped fundraise most, the firm is attracted by relatively high awareness about solar energy with mature markets, and the availability of mobile money platforms – such as apps – that mean consumers can easily make payments using their mobile phones, McShane said.
“So far … things have gone smoothly. Those we have given money to are making their repayments on time and so far we cannot say there is risk in funding these investments, said McShane.
- How to Crowdfund (with Pictures) - wikiHow - June 7th, 2018
- Property Crowd Funding - The Magic of Modern Day Investing - HuffPost - September 4th, 2017
- Getting Crowdfunding Fundamentals Down to A Science In Advance Of Campaign Key To Success - HuffPost - August 28th, 2017
- Dreamhost Crowd-Funding Legal Action Against DOJ - eWeek - August 22nd, 2017
- Buy a share in a brewery: Pozible launches equity crowd-funding site Birchal - The Sydney Morning Herald - August 1st, 2017
- Woman who contracted E.Coli returns home from Turkey after crowd funding appeal - Glasgow Live - July 9th, 2017
- Africa's first impact-focused equity crowd funding portal founder ... - CNBCAfrica.com - July 5th, 2017
- Crowd funding campaign to save a two-year-old kid - Times of India - July 2nd, 2017
- Arrowtown musician Holly Arrowsmith crowd funding new album - The Southland Times - June 26th, 2017
- Ex-Googler Lina Gantar launches crowd funding agency in Manchester - Manchester Evening News - June 25th, 2017
- Crowd funding could be used to buy the long-vacant Bell Building downtown - Wyoming Tribune - June 24th, 2017
- Wyo. Sec of State unveils new crowdfunding platform - Wyoming Business Report - June 16th, 2017
- Wyo. Sect'y of State unveils new crowdfunding platform - Wyoming Business Report - June 14th, 2017
- Where is the crowd-funding for the destitute? - News24 - June 9th, 2017
- Florida education news: #HB7069, teacher diversity, crowd funding and more - Tampabay.com (blog) - June 5th, 2017
- BBB Has Advice Before You Contribute To A Crowd Funding Site - Newstalkkgvo - June 2nd, 2017
- Catapooolt all set to Catapult Crowdfunding in India with an Asian Record - Bizztor (press release) (blog) - May 19th, 2017
- Should you invest in Bitcoins, crowd funding, P2P lending? - Economic Times - May 15th, 2017
- Cork Foundation's Live Crowd Funding event - The Avondhu Press (press release) - May 6th, 2017
- Will crowdfunding get a synthetic biology win? - PLoS Blogs (blog) - May 3rd, 2017
- Impact Guru, GlobalGiving tie-up to scale crowd funding in India - Daily News & Analysis - May 2nd, 2017
- Plastc Card Is Cancelled: The Dangers Of Crowd Funding Tech - Forbes - April 29th, 2017
- Donate safely: Avoiding crowd funding scams - KXLY Spokane - April 20th, 2017
- Maharashtra schools raise Rs 216 crore via crowd funding - The Indian Express - April 18th, 2017
- Crowdfunding: affordable bee surveillance for hive health - Scoop.co.nz (press release) - March 29th, 2017
- Crowd funding: SECP warns of false scheme - The Express Tribune - March 28th, 2017
- Arsenal fan plots sensational crowdfunding campaign to BUY the club from owner Stan Kroenke - The Sun - March 23rd, 2017
- How to make crowdfunding work for you - Buffalo Business First - February 13th, 2017
- Crowd funding | ASIC's MoneySmart - September 17th, 2016
- Crowd Funding - October 23rd, 2015
- Crowdfunding - P2P Foundation - October 23rd, 2015
- Comparison of crowdfunding services - Wikipedia, the free ... - September 5th, 2015
- Fundraising Script,Crowd Funding Script,Crowdfunding ... - August 14th, 2015
- The Life Chest: Crowd Funding Video - Video - May 5th, 2015
- THIS TOKYO #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS LOVE #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS PSYCHIC #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS SUPER #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS ROADHOUSE #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS BEYOND #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS HEARTBREAKER #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS WWW #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- THIS GENUINE #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- True Colours Crowd funding Campaign - Video - May 4th, 2015
- THIS NEW YORK 2015 #FASHION BRAND GIFT CLOTHING & ACCESSORIES SURPRISE! #THIStm - Video - May 4th, 2015
- Armitage Dinosaur - crowd-funding video - Video - May 3rd, 2015
- Who benefits from crowd funding? - Video - May 3rd, 2015
- The Man Who Found His Freedom - Video - May 3rd, 2015
- Crowd Funding proof V1 - Video - May 3rd, 2015
- TEN FOOT TONE - New CD - TASTE GOOD - Video - May 3rd, 2015
- One Spark/Tamarin Fruits - Video - May 1st, 2015
- Crowd Funding Video- BROKEN ROAD (Short Film) - Video - April 30th, 2015
- Crowd Funding video San Jose Bike Clinic - Video - April 28th, 2015
- Domestic Violence & Abuse Help Break the Cycle - Seed the Books Crowd Funding Campaign - Video - April 28th, 2015
- LEARN IT | BUILD IT | MANAGE IT: FINANCING - Crowd Funding - Video - April 27th, 2015
- Crowd Funding- Habitat for Humanity Charity Trip to Cebu in June 2015 - Video - April 27th, 2015
- Annalakshmi on the swan Crowd funding 14 04 15 WM - Video - April 26th, 2015
- Beat Buddy Inside Story - Video - April 26th, 2015
- Engineers Corset Crowd Funding Video - Video - April 26th, 2015
- "Welcome to the Shop" -HPER Team Crowd Funding Campaign - Video - April 24th, 2015
- Toms Crowd Funding 32 SD 480p Copy - Video - April 24th, 2015
- Blake Lodge Centre, Plymouth Deaf Association - Crowd Funding - Video - April 24th, 2015
- Copy of Heart Vs. Head Crowd Funding Campaign-Final Request - Video - April 24th, 2015
- April 2015: Help Wall St for Main St Crowd Fund! - Video - April 24th, 2015
- Climate for Change Crowd funding video - Video - April 24th, 2015
- Sacred Foundations, Inc. Crowd Funding Intro - Video - April 23rd, 2015
- Specialty Beer - Video - April 23rd, 2015
- Crowd Funding Take 4 18 15 - Video - April 23rd, 2015
- Baby Got Wings / I Like Big Bugs - Video - April 23rd, 2015
- Evolution of Color in Australian Frogs Crowd Funding - Video - April 23rd, 2015
- Creative Lab Curaao over crowd funding actie Revive Gomezplein - Video - April 23rd, 2015
- My TubeStart update! - Video - April 23rd, 2015
- Alphaworks Equity Crowd Funding Platform Rebrands To Quire - Video - April 23rd, 2015
- Community Crowd Funding - Video - April 21st, 2015
- TOP Foundation Crowd Funding Video - Video - April 21st, 2015
- HIR 3 - crowd funding campaign on TravelStarter - Video - April 21st, 2015
- Get us to the World body painting festival - Video - April 21st, 2015
- BluSticks Crowd Funding Video (ENT 4113 - Group 6) - Video - April 21st, 2015
- Skin4Nino crowdfunding - Video - April 21st, 2015
- Sacred Foundations, Inc. Crowd Funding Video - Video - April 21st, 2015