FSD Africa is proud to announce a 2 year programme of support to the African Crowdfunding Association (ACfA) through a £230,000 grant. This programme is a market-building project that allows FSD Africa to give industry-wide support to the development of alternative lending and capital raising platforms that help connect diverse sources of capital, both debt and equity, to early stage and growth companies.
Mark Napier, Director of FSD Africa, said: “We are excited at the level of ambition that ACfA has shown in wanting to give a serious boost to the development of the crowdfunding industry in Africa. We need innovative approaches to SME finance in Africa. Crowdfunding has the scope to become a much bigger part of the funding landscape in Africa, linking pools of domestic and international capital to job-creating investment opportunities. ”
Kevin Allen, Chairperson at ACfA, said: “The team at ACfA is excited to start work on what is set to be a game-changer for the crowdfunding industry in Africa, and a welcome boost for early-stage SME finance in general. Thanks to support from FSD Africa, ACfA will be strengthened as a private sector-led institution committed to innovation in African capital markets. We will engage African regulators in the design of a label which will be granted by ACfA to securities-based crowdfunding platforms that fulfil requirements on investor protection, risk awareness, issuer disclosure and other criteria. This label will build trust and transparency between investors, platforms and SMEs, while creating a critical feedback loop between the industry and regulators.”
This project continues FSD Africa’s work to encourage innovation in Africa’s financial markets, especially through the use of technology-led models of distribution. FSD Africa has actively encouraged regulators across the region to support innovation through the use of regulatory sandboxes to establish systematic communications channels between innovative service providers and regulators in the lead up to formal regulation as markets evolve. FSD Africa believes that a strong industry association can play a critical role in helping this emerging industry gather momentum, building investor confidence by putting in place industry-led standards and encouraging innovation and competition through knowledge-sharing activities.