The African Crowdfunding Association (ACfA) has been launched as a way to lobby for the creation of crowdfunding legislation on the African continent.
The ACfA hopes to increase public awareness about crowdfunding, and create a more cohesive industry structure in Africa that protects investors and democratises access to capital for all Africans.
South African online crowdfunding start-up, Thundafund, and SA-based international online real estate investment marketplace, Wealth Migrate, have partnered to lay the groundwork for the ACfA. The companies are urging policy-makers and those passionate about increasing access to capital to join them.
"We see crowdfunding as the democratisation of financing for entrepreneurs," says Patrick Schofield, CEO and co-founder of Thundafund.
Crowdfunding involves raising funding for a project from a large number of people, typically via the Internet, and has already found success in the United States, Europe and Asia.
Massolution's 2015 crowdfunding industry report predicts the global crowdfunding market will reach $34.4 billion (R495 billion) in 2015, and is set for continued explosive growth.
"Global crowdfunding experienced accelerated growth in 2014, expanding by 167% to reach $16.2 billion raised, up from $6.1 billion in 2013. In 2015, the industry is set to more than double once again," according to the report.
According to Wealth Migrate and Thundafund, in nations where crowdfunding is legal, it has "levelled the economic playing field, giving access to capital needed for wealth creation to women and minorities that typically are underserved by traditional capital markets".
"There is a huge wealth gap in the emerging world, and crowdfunding is a solution to close this gap," says Scott Picken, CEO of Wealth Migrate and ACfA founding member.
"Crowdfunding can provide equal opportunity and equal access to capital that is essential for wealth creation within underserved populations. The ACfA will educate not only the public, but also the policymakers about the benefits of crowdfunding for Africa," says Picken.
"There are so many inspiring entrepreneurs in Africa who could do so much to change the world with access to capital. Crowdfunding is the next-gen solution to Africa's development agenda," says Schofield.
Picken says the ACfA hopes to follow in the footsteps of all the other crowdfunding associations around the world to bring this technology to South Africa and the continent as quickly as possible.
"It should be easier than anywhere else in the world, as South Africans have had stokvels for a very long time. It is estimated that one in every two black adult South Africans is a member of at least one of the 89 000 stokvels. Black adult South Africans invest approximately R12 billion in stokvels a year."
Picken believes crowdfunding is coming to Africa; it is just a matter of time.
"We are so happy to have started the conversation with the authorities to ensure it is done safely and sustainably," comments Picken.
"What is truly amazing is that in the first world, crowdfunding is a 'nice to have', whereas in the emerging world it is a 'necessity'."
The ACfA will act as the industry association for crowdfunding professionals and companies in Africa. It has already received support and recognition from similar industry bodies around the world which have been instrumental in the process of bringing crowdfunding awareness and implementation to their region. These include the China Crowdfunding Society, Uganda Crowdfunding Network, UK Crowdfunding Association, and Crowdfunding Institute of Australia.
Xiaochen Zhang, who set up Crowdfund China Society and works on crowdfunding for the World Bank, has agreed to sit on the board, along with Dan Marom, who advised on and influenced the passage of crowdfunding regulations by the European Union.
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