Project Financing in Emerging and Developing Countries via Crowdfunding

1. Crowdfunding for Projects in
Developing Countries
For discussion purposes.
Prepared by Chris Gossye
chris.gossye@gmail.com
June 2015

2. Foreign Direct Investments in
Developing Countries are the most
important lever for growth
Given the appropriate host-country policies and a basic level of
development, FDI
• triggers technology spillovers
• assists human capital formation
• contributes to international trade integration
• helps create a more competitive business environment
• enhances enterprise development.
All of these contribute to
• higher economic growth, which is the most potent tool for
alleviating poverty
• improved environmental and social conditions in the host country
by, for example, transferring “cleaner” technologies
• more socially responsible corporate policies

3. OvO has 2 business models
B2B is the FDI component
| 6/29/2015 | 3
DONATIONS
to projects managed by NGOs
• 130 Belgian Enterprises
• projects sourced from 8 NGOs
• 800K€/y
DIRECT INVESTMENTS (LOAN/CAPITAL)
to projects of Local Enterpreneurs.
• Loans, Capital, Expertise
• One to one match making with limited
‘sales’-force
• Projects sourced form Bidnetwork
• 15 projects / year
• 250K€/y

4. What’s the problem with direct
investments today ?

5. Proposal to extend the current B2B
business model into P2B

6. NEW
EXISTING
ADAPT

7. Private Investors behaviour is changing
| 6/29/2015 | 7
Megatrends that influence investors behavior:
1. Personalization: investors want a customized / self-made investment
solution
2. Relevance: investors want to invest in relevant projects, they prefer
real economy
3. Transparency: investors want to understand where the money is
going, how it is being spent, how the project evolves
4. Simplicity: investment proposals should be easy to understand
5. Decision Speed: digital access to info and fast decisions
6. Influencers (peers) have more impact than experts
Investors act more and more:
1. Globally: all projects that comply to the above rules are eligible
2. Risk/Return realism: they are willing to take ring-fenced risks in
return for higher yields

8. Crowdfunding is a channel that fills in
private investors expectations
| 6/29/2015 | 8
1. Personalization
2. Relevance
3. Transparency
4. Simplicity
1. Speed
2. P2P advice
1. Investors can compose their own
project portfolio
2. Real projects in a real economy,
endorsed by major brands
3. Real people, clear business cases
and project cards. Follow-up info
on results year after year.
4. Should fit into the world of
internet communication
5. Digital access to info and fast
decisions
6. Timeline of Capital raised, # of
subscribers etc. converts the more
reluctant investors

9. 100%
Non-Financial
26%
Donations
6%
Gofundme
+45%
Rewards
20%
Kickstarter
Ulule.frr
+127%
Financial
74%
P2P
Lending
45%
Zopa
+133%
P2B
Lending/Equity
29%
MyMicroInvest
+270%
Bolero
Angel.me, crofun,
lookandfin ,
finicrowd …
Growht figures of Crowdfunding
confirm the analysis(Source: MyMicroInvest)
| 6/29/2015 | 9

10. | 6/29/2015 |
Slide Library v1
10
Crowdfunding is global

11. A selection of DC projects can
compete for int’l investors money
| 6/29/2015 |
Slide Library v1
11

12. Wrap up
What’s in for the stakeholders …
| 6/29/2015 | 12
• Private Investors: SRI diversification of portfolio, easy to
understand projects, follow-up reporting, emotional
involvement factor
• Projects: private financing can complement business financing
for eligible projects
• Investment Funds: risk diversification, sales volume
• Crowdfunding service provider: sales volume and improved
ROCE
• Ondernemers voor Ondernemers: total funds raised, pre-
screening by crowdfunding members, brand recognition
• Financial Partners (Banks, Insurance Cys …) integrate the SRI/DC
offer into their value proposition catalogue

13. Let’s join the action
| 6/29/2015 | 13
MyMicroInvest has opened it’s website for all new project proposals
https://fuente.mymicroinvest.com/#!/authenticate so let’s introduce 1 or 2
OvO/B2B projects that can compete with the current crowdfunding projects.
This market test will allow to measure the level of interest of investors for
this kind of projects.

14. Appendices

15. Notes from 1st contact round
• How can we make sure that the projects who have received the funds are on
track ?
• Enterpreneurs for Enterpreneurs should be the ‘representative’ / ‘white label’
for the DC projects when presenting them to investors. This idea could go as far
as Efor2 bunddling a number of projects into one global investment offering,
thus reducing costs of go 2 market.
• It helps a lot to have the African Enterpreneur(s) life or via skype for the
fundraising tour.
• Crowdfunding investors decide impulsively / emotionally (probably more) than
rationally. The crowdfunding campaign, when successful at the start, also
attracts more reluctant investors at the end of the campaign.
• Crowdfunding should be looked at as part of a global (structured) financing
plan, starting with FFF then venture capital then P2B loans, then banks …
• Crowdfunding comes with more costs – the tagline ‘100% your investment” has
to be restricted to B2B.
• Crowdfunding is ook van toepassing voor gifts – er zijn gespecialiseerde
crowdfunding platformen voor gifts/rewards (cf Ulule.fr)
• Een gezamenlijke aanpak met gelijkaardige organisaties aan Ondernemers voor
Ondernemers is mogelijk / wenselijk (cf Autre Terre)

16. Contact list
Name Function Company
Freddy De Mulder Coordinator B2B, Lid raad van
Bestuur
Ondernemers voor
Ondernemers
Björn Macouter CEO Ondernemers voor
Ondernemers
Luc Bonte Voorzitter Raad van Bestuur Ondernemers voor
Ondernemers
Chantal Kamatari CSR Manager BNP Paribas Fortis
Claude Van Baelen CSR Manager BNP Paribas Fortis
Chris Wouters Business Development Mgr
Corporate & Public Banking
BNP Paribas Fortis
Nicolas Fiatieff Marketing Director BNP Paribas Fortis
Vincent Oury Directeur Autre Terre asbl
Roland Nobel Co-founding Partner MyMicroInvest