MICROCAPITAL BRIEF: Mobi-Changa, ThundaFund, UNCDF Crowdfunding Platform to Help Youth, Women in The Gambia Raise Money for MSMEs, Build Financial Histories

As part of the EU-funded “Jobs, Skills and Finance (JSF) for Youth and Women in The Gambia Programme,” the UN Capital Development Fund (UNCDF) is partnering with crowdfunding platforms Mobi-Changa and Thundafund to develop a new fundraising platform. The service will allow individuals to donate to and invest in micro-, small and medium-sized enterprises (MSMEs) led by women and youth in The Gambia, with the aim of empowering individuals economically as well as supporting communities through the COVID-19 pandemic.

Mobi-Changa and Thundafund will test a variety of crowdfunding models on the platform, including “business and social crowdfunding” and “donations-based campaigns focused on innovative solutions to fight…COVID-19.” The target is to raise a total of USD 840,000 for 8,000 small businesses by April 2022.

JSF Financial Inclusion Specialist Edwin Mensah explained, “Crowdfunding and peer-to-peer lending platforms, in particular, offer alternative financing options for youth entrepreneurs’ access to capital. With many entrepreneurs looking to family and friends for start-up funds for their businesses, crowdfunding offers the possibility of pooling these funds in a formal structure and building a financial history which will allow financial service providers to better engage these entrepreneurs.”

JSF is supported by the International Trade Centre (ITC), which was established in 1964 by the United Nations and the World Trade Organization. With the mission of fostering “inclusive and sustainable economic development,” ITC works alongside policy-markers, exporters, and “trade and investment support institutions” to assist in the development, success and “internalization” of small and medium-sized enterprises. Through its partnership with UNCDF, ITC aims to increase youth employment opportunities and assist entrepreneurs via technical and business training programs. ITC is active in Africa, the Americas and Eurasia.

Thundafund is a South Africa-based crowdfunding platform allowing entrepreneurs in Africa to raise capital in small portions from a large number of individuals. The company also provides entrepreneurs with “business and mentorship support services.” The platform has raised a total of USD 190,000 from 23,000 people for 1,200 projects.

Established in Kenya in 2013, M-Changa is a virtual fundraising platform. Its “mobile fundraisers” are designed for individuals with limited internet access who are seeking funds for purposes such as healthcare or education. These can be arranged via telephone and then shared one-on-one or via social media. Supporters then can contribute via mobile money services. M-Changa’s “online fundraisers,” which are targeted to businesses as well as individuals, can accept local or international payments via credit card and the PayPal and SimbaPay services. As of May 2020, the platform has been used for 40,000 fundraisers, raising KES 250 (USD 2.30) to KES 8 million (USD 75,000) per campaign from a total of 685,000 supporters.

Established in 1966 by the UN General Assembly, UNCDF is a UN agency affiliated with the United Nations Development Programme (UNDP). UNCDF endeavors to create opportunities for poor people in developing countries and their small businesses by increasing access to microfinance and other forms of investment capital. During 2018, the organization’s expenditures totaled USD 65 million, operating in 40 countries in Africa and Asia. UNCDF has a particular commitment to countries emerging from crises. As part of this work, UNCDF supported financial services providers that serve a total of 32 million customers.

By Jessica McLeod, Research Associate

Sources and Additional Resources

UNCDF news release
https://www.uncdf.org/article/5728/uncdf-launches-a-crowd-funding-platform-for-young-gambian-entrepreneurs

JSF description from UNCDF
https://www.uncdf.org/youthstart/the-gambia

JSF description from ITC
http://www.intracen.org/jsf/gambia/

ThundaFund homepage
https://thundafund.com/

Mobi-Changa homepage
https://www.changa.co.ke/

ITC homepage
http://www.intracen.org/

UNCDF homepage
https://www.uncdf.org/

UNCDF report on 2018 results
https://undocs.org/DP/2019/18

Previous MicroCapital article on UNCDF
https://www.microcapital.org/microcapital-brief-safeboda-uganda-uncdf-launch-e-commerce-platform-for-market-vendors-looking-to-maintain-operations-during-pandemic/

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