There is a huge crowdfunding potential in Nigeria according to a new report has been published recently. The report titled " Crowdfunding Potential for Nigeria 2017", assessed the development of the crowdfunding sector in Nigeria.
Huge Crowdfunding Potential in Nigeria – New Report
There is a huge crowdfunding potential in Nigeria according to a new report has been published recently. The report titled ” Crowdfunding Potential for Nigeria 2017″, assessed the development of the crowdfunding sector in Nigeria. It showed that the country has certain elements in place, making it possible to create an effective crowdfunding industry in the West African country.
Published by CrowdfundingHub, the European expertise centre for alternative and community finance, the report shows that these elements are: a large, fast-growing population; widespread mobile and internet connection; strong social usage and a great network of family and friends; a booming entrepreneurial scene; and effective payment solutions.
“In Nigeria, Africa’s largest economy and home of millions of young entrepreneurs, crowdfunding could be a great tool to kick-start organisations and individuals,” according to the report, authored by Suzanne Wisse-Huiskes, a Dutch crowdfunding expert.
The report says out of the $83.3 million raised by the African crowdfunding market in 2015, Nigeria accounted for $7-$8 million. The major source of Nigeria’s crowdfunding came from peer-to-peer business lending and equity crowdfunding – which accounted for 90 percent of the activity. The remaining 10 percent was attributed to microfinance, donation and reward-based crowdfunding.
The leading crowdfunding platforms in Nigeria are: donate-ng.com, a donation-based platform targeting charities; Malaik, an equity-based platform; Imeela, a donation-based targeting designers, musicians, and entrepreneurs; and Naturad, also a donation-based platform targeting charities.
Notwithstanding the growing crowdfunding ecosystem in Nigeria, the report cites several issues that could derail the promising potential of the industry.
According to the report, the most pressing issue in 2017 is regulation. In 2016, the Securities and Exchange Commission banned crowdfunding activities in Nigeria’s capital market indefinitely to allow the regulator create rules to govern the industry. The report says SEC’s action would stymie the growth of crowdfunding in Nigeria.
“The 2016 ban on equity crowdfunding in Nigeria is seriously slowing down the introduction of crowdfunding in the country,” the report says. “Since the authorities in Nigeria struggle with the regulation on equity based crowdfunding, the situation demands a proactive attitude from existing platforms and crowdfunding associations.”
Other major concerns, according to this report, are lack of trust and access to credit facilities.
“These challenges will not be easy to tackle, yet ambitious entrepreneurs in Nigeria are utilizing innovative strategies to overcome these obstacles when raising money from the crowd,” according to the report.
Download Suzanne Wisse-Huiskes’ “Huge crowdfunding potential in Nigeria” report here