Crowd funding is the biggest opportunity of the century. Imagine getting a huge sum of cash with little or no interest rates with favorable terms and conditions with a people you share same interests. Sound familiar? Of course it is! Maybe you call it something different like insurance, ‘chilimba’, savings group, village banking or capital markets. This is when individuals or organizations bring their resources together to achieve a goal or project for the benefit of all parties involved. For example, a group of ten individual put together a contribution of 1000 per month to raise 100,000 after ten months to buy a tractor to hire out or use for farming.
With the economy slowing down, high interest rates coupled with the current cash squeeze, crowdfunding is one those things we should take seriously as family, friends, business partners and yes as a nation. When an economy is taking a hit, we all know this is when there is opportunity for growth. With dropping prices for capital assets like land and machinery, this the best time to start up long term investments consumers are switching products to suit their pockets. It’s good to have cash right now.
With advances in technology, its time the little guys have a chance to make big money by joining a group of individuals with the same interests. This a proved formula with WhatsApp groups and block chain technology to be used for checks and balances. Every individual is held accountable. In Zambia, marketeers, bankers, businessmen miners and bus drivers to name a few have joined the rush. Imagine that farmer in the rural village getting a hammer mill, warehouse or borehole. This is really the meaning of TEAM WORK MAKES THE DREAMWORK!!!
Crowdfunding has been happening for a long time now, but this has been given to licensed organizations and administrators like pension funds, banks, capital markets(exchanges) and insurance companies. This is good because of the dangers posed by fraud and scams to the credibility of the financial system. Banks have been pivotal to our development. These institutions have been collecting small and large amounts of cash in bank accounts (deposits) and loaning them out to individuals and businesses who want to get investment for an interest. The Capital Markets have been collecting excess funds from investors who buy shares and give the money to listed and regulated companies for investment. Insurance companies have been collecting premiums and contributions from clients, pooling the funds and sharing the risk. All in all, with the current financial times, Crowd funding is the New Hope for raising capital for small businesses in Zambia.