Social News XYZ     

Leveraging the Investment Power of Many to Crowd-in Capital in Ghana

Leveraging the Investment Power of Many to Crowd-in Capital in Ghana
Download logo
Leveraging the Investment Power of Many to Crowd-in Capital in GhanaThe Ghanaian financial landscape is poised for a significant transformation with the recent launch of comprehensive guidelines for investment-based crowdfunding. This milestone marks a collaborative effort between the Securities and Exchange Commission (SEC) of Ghana and the UN Capital Development Fund (UNCDF) and signifies a commitment to fostering a more inclusive and active investment ecosystem. The guidelines developed under the GrEEn project with funding support from the European Union Emergency Trust Fund (EUTF) for Africa is aimed at empowering businesses, safeguarding investors, and propelling Ghana towards a future of innovation and economic opportunity.

Prior to the development of clear regulations, crowdfunding in Ghana faced significant uncertainty. Promising businesses struggled to secure funding, while potential investors lacked the necessary confidence to participate. UNCDF played a pivotal role in unlocking this potential. First, UNCDF provided funding and technical assistance to test and pilot various crowdfunding solutions as documented in our blog which delved into the critical lessons and significant milestones after three years of implementing the GrEEn project

These pilots brought to the fore the complexity of the crowdfunding space, cutting across different touchpoints that include not only crowdfunding platforms, but also fund managers, investors and regulation. Our role in contributing to developing the investment-based crowdfunding guidelines naturally stemmed from our expertise, allowing us to provide technical assistance to the SEC. The journey that UNCDF undertook to support the regulators in this achievement are documented here. These guidelines aim to bridge the gap and establish a robust framework that fosters trust and transparency within the crowdfunding ecosystem.


“As we unveil these Guidelines, we are not only addressing the financing gap faced by MSMEs and startups but also ushering in a new era of financial inclusion and investment opportunities”, said Reverand Daniel Ogbarmey Tetteh, Director General of the SEC. He further emphasized the multifaceted nature of crowdfunding “We recognize that crowdfunding is not just about raising capital; it is about building communities, fostering innovation, and driving economic growth." He further elaborated that the guidelines align with Ghana's National Financial Inclusion and Development Strategy and will ultimately make capital markets more accessible to all Ghanaians, positioning Ghana as an emerging hub for crowdfunding in Africa.

The guidelines, developed in collaboration with key stakeholders and following extensive consultations and technical assistance support of Lelapa African FinTech Advisory provide a viable platform where anyone with a brilliant idea can connect with a network of potential investors to pool resources and bring their vision to life. It will fuel innovation across diverse sectors, from agriculture and healthcare to renewable energy and social impact initiatives.

The potential benefits of these guidelines therefore extend far beyond simply providing alternative financing avenues. Specifically, it will offer Micro, Small, and Medium Enterprises (MSMEs) and startups a critical lifeline by providing them viable funding sources to grow their aspirations. With a view to prioritizing investor safety, the guidelines require crowdfunding platforms to provide clear and comprehensive information about investment risks and potential returns, allowing individuals to make informed investment decisions. Further, the regulatory framework will foster competition, drive down costs, and encourage the development of innovative solutions for businesses seeking to raise capital. Ultimately, the guidelines will enable crowdfunding to open doors for traditionally excluded groups to participate in the investment landscape, promoting financial inclusion.

The emphasis on financial inclusion and digital transformation fostered by these crowdfunding guidelines aligns perfectly with the UN Sustainable Development Cooperation Framework for Ghana. This framework serves as the nation's strategic blueprint for achieving the Sustainable Development Goals (SDGs) and prioritizes partnerships, innovation, and inclusive growth. Charles Abani, the UN Resident Coordinator in Ghana, further underscored this alignment in his remarks at the launch. “Crowdfunding, with its ability to democratize finance and empower individuals to contribute to causes they believe in, is one such mechanism. By enabling the aggregation of small contributions from many individuals, crowdfunding can help finance projects that drive economic growth, social inclusion, and environmental sustainability."

With the guidelines launched, the critical next step for SEC and UNCDF is to continue their strong collaboration for its effective implementation. This aligns perfectly with UNCDF's mandate and ambitions to "crowd-in" finance where it is most needed. By mobilizing and catalyzing an increase of capital flows for SDGs impactful investments to Member States such as Ghana, the most pressing development challenges faced by vulnerable communities in these countries will be addressed thereby contributing to sustainable economic growth and equitable prosperity. This will involve attracting additional resources to support the large-scale implementation of the guidelines. This focus on sustainability ensures the long-term viability of the crowdfunding ecosystem, ultimately guaranteeing broader financial inclusion for all Ghanaians in the digital age.

Distributed by APO Group on behalf of United Nations Capital Development Fund (UNCDF).

Facebook Comments
Leveraging the Investment Power of Many to Crowd-in Capital in Ghana