May 06, 2021

Enhancing access to finance for agribusinesses through crowdfunding

Kenya

Mali

Nigeria

Over the past year, Covid-19 has brought immense negative socio-economic impacts on small and medium enterprises(SMEs) in developing countries. Most of the SMEs working with 2SCALE in Sub-Saharan Africa were adversely affected, with many facing cash flow challenges and consequently unable to acquire inputs to enhance production, retain their workforce, and engage in product diversification.

Contributing to the achievement of Sustainable Development Goals (SDGs) is a key focus of 2SCALE. However, failure to mitigate against the effects of the pandemic on SMEs within our core Agri-food value chains could disrupt this goal. This has the potential to trigger significant loss of income and disruption of food value chains, especially for vulnerable enterprises and populations at the Base of the Pyramid.

To mitigate the impact of such disruptions and help business champions and SMEs stay afloat, 2SCALE started a crowdfunding initiative to help them raise funds from a broad range of supporters, locally and internationally. The 2SCALE crowdfunding platform is an easy way for entrepreneurs to raise funds with the click of a button. Reaching a big crowd is enhanced by the ease of sharing the SMEs' pitches to people from all walks of life through the internet and social media platforms.

In 2020, 35 SMEs from Mali, Kenya, and Nigeria participated in the first phase of this initiative. Despite a challenging start, 90% of them ran a successful campaign, raising over 60% percent of their targeted funds! A total of €53,831 was raised, with over €35,000 matched by 2SCALE. This provided support to smallholder farmers and business champions to meet daily expenditure required to produce and supply quality food products.

According to Salome Nganga, 2SCALE’s Financial Inclusion Officer, crowdfunding provides a means to cushion SMEs from the disruption caused by the Covid-19 pandemic.

As the largest incubator for inclusive Agribusinesses in Africa, the 2SCALE Crowdfunding platform has been a catalyst to tackle most financial needs faced by enterprises. From our previous experience, our MSMEs, other businesses and fundraising supporters have looked at this opportunity as a transformative way to create a more convenient, open, and transparent means of contributing towards sustainable food supply to the base of pyramid consumers.

Power to the crowd again!

After a successful first phase of crowdfunding, we are happy to announce that the second phase will kick off today - the 6th of May 2021- with approximately 50 businesses from Nigeria, Kenya, and Mali participating. This is an opportunity for SMEs to pitch and sell their inclusive agribusiness ideas to an online crowd. The funds raised will provide these enterprises with working capital, capital expenditure for assets, and extension services to smallholder farmers for continued production of input needed by agro processors.

Judith Chabari-2SCALE Kenya Country Team Leader says:

In an era where social distancing is the new norm, crowdfunding provides a convenient digital solution to raise financing and keep our SMEs afloat. We did it together in the last phase. With the lessons learnt and the success achieved, let us do it again- bigger and better!

One investment at a time to accelerate agribusiness in Africa

To help our business champions and associated SMEs carry out their projects for sustainable and inclusive development, please visit the 2SCALE crowdfunding website, check out the pitches and contribute. Remember that no amount is too small to make a difference!

Any company that will raise 50% of the targeted amount will benefit from a financial bonus of €2,000 from 2SCALE. The best crowdfunding campaign per country will receive a cash reward of €1,500!

These donations will strengthen the engagement with smallholder farmers and create more inclusive agribusinesses across Africa to ensure their continuity during and after these challenging times.

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