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.