In September 2020, 2SCALE launched a crowdfunding campaign, a platform aimed at alleviating the liquidity crisis faced by Micro, Small, and Medium Enterprises (MSMEs) due to the Covid-19 pandemic. Two years later, two cohorts consisting of over 91 MSMEs from Kenya, Nigeria, and Mali have successfully participated in this initiative. A total of $151,543 was raised during the first phase while $174,573 was raised during the second cohort in 2021. Contributions mainly came from family, friends, and other individuals interested in helping their business overcome cash flow issues. Companies that mobilized 50% of the targeted resources were eligible for a financial bonus of €2,000 from 2SCALE.
While most of these MSMEs had limited or no options in terms of insurance, credit, and risk management, -as is the case with most MSMEs- funds raised through the platform enabled them to continue with their operations. In Nigeria, a food distributor found a viable solution to solve his transportation challenges. Despite the significant threat due to the impact of the pandemic, this MSME acquired a Ford Transit van which he uses to distribute food products to low-income consumers.
In Mali, while the businesses, especially SMEs, were facing both the Covid 19 pandemic and a security crisis, the crowdfunding initiative came at the right time and lived up to participants’ expectations. Despite some reluctance from some contributors, people finally understood that it was a solidarity impulse that should be supported for the relaunch of the economic activities of small businesses. This was the very first time that Dialiya Keita, from the Keitala Négoce partnership participated in a crowdfunding campaign. She recounts:
Crowdfunding was quite new for us. I would say that Malians did not understand the concept at first. Some people asked me a lot of questions because they thought it was a scam. I had to take a long time to convince some people of how crowdfunding works. What really moved me was when companies competing with mine, showed support by donating towards my initiative. That really surprised me! The campaign was a success, and I realized that there are people who care about the success of our business.
The success of the crowdfunding initiative has proven that a little goes a long way, as people are willing to support small and mid-level enterprises. With this, the third phase which commences on25 May this year has incorporated a more innovative option- Crowdsourcing.
Refining the innovative approach: added benefits for MSMEs
What is Crowdsourcing?
Simply put, this is the process of collecting ideas, opinions, and/or content with the help of contributions from many diverse people, who are third-party entities to the business. Through this platform, MSMEs can get solutions to problems they face, or get ideas on how best to execute their businesses and maximize profits.
Crowdsourcing is a tool used to collectively come up with solutions or help out on a problem by consulting ‘the crowd’. MSMEs will easily start an initiative on the platform and add activities to their initiatives. This means all 2SCALE connections will have an opportunity to set out coaching questions or business-specific questions on the platform. Not only will this help MSMEs solve issues, but it will also increase the collaboration of the MSMEs, local partners, and international stakeholders. People who sign up for the activity can be from all over the world. That way a poultry farmer from Mali could connect with another poultry farmer in Kenya, who could think of solutions to certain problems together. Also, a cassava farmer from Nigeria could also connect to a coach based in the United States to learn about a certain topic for their business.
We wish all participating MSMEs successful campaigns and remember, all resources availed to them will come in handy to promote the sustainability of their innovative businesses.