African Startups Turn To Crowdfunding As Banks Look Away
From DW.DE via Crowd Fund Beat
Jacques Georges Badjang was never really interested in emigrating abroad. Even when he was a student, he was determined to show it was possible to create and achieve something in his native Cameroon.
As there were several beekeepers in his neighborhood, he decided there was a future in honey. He gave up his history course and went to work.
“It all started at home, in my mother’s kitchen,” said Badjang. This was where he washed the glass jars, filled them with honey, and then went from house to house to sell them.
The one-man operation has since turned into a flourishing business, “Les Mielleries” which markets honey from more than 200 beekeepers.
The honey is filtered and then packaged in Douala, Cameroon’s largest port city. While expanding his firm, Badjang encountered a problem familiar to many small businesses in Africa. The banks would not lend him money because he couldn’t convince them that he would be able to pay it back.
Investors operating from a distance
Last year, Badjang found a new solution to this old problem. He heard about the newly established crowdfunding platform BlueBees. Based in France, it was just about to go online.
This form of financing in which entrepreneurs use internet platforms to ask the general public to invest in their businesses is already well established in Europe and the United States.
Online users decide whether they want to invest in a particular scheme, and how much they wish to contribute. These platforms are often used for art or social projects.
BlueBees specializes in entrepreneurs from developing countries, bringing them together with investors from Europe. “Jacques Georges is a really serious entrepreneur,” said Emmanuelle Paillat, managing director of BlueBees.
“He needs us, because he has no access to the banks. In Cameroon, they would ask him for surety and he can’t provide it – despite the fact that his firm has been in existence for ten years,” he said.
“Les Mielleries” was BlueBees’ very first project and was launched in the spring of 2013. Badjang borrowed 20,000 euros ($26,900) for his honey business from more than 100 creditors.
It was a worthwhile investment for all involved. After just six months, Badjang had paid back the loan — plus ten percent in interest. One percent went to the BlueBees platform.
Other platforms for Africa
Meanwhile, the “crowd” – the BlueBees users – is now supporting other projects. They have invested in soybean cultivation in Burkina Faso, in a medicinal herb garden in Peru and in a leeches’ cooperative in Madagascar, to name but a few.
In recent months, other platforms have begun to offer crowdfunding for African small business owners. They include Fadev (Fonds pour le développement Afrique) and Babyloan, which taps the African Diaspora as a source of potential investors.
Babyloan wants to collect 50,000 euros for 50 small business owners in Benin by 15 September, 2014. Other platforms, such as the London-based “AfrikStart” or “SliceBiz” in Ghana, are preparing for launch.
Read more at Crowd Fund Beat