Crowdfunding Hailed as a way to ‘Democratise’ Development Financing

Addis Ababa, Jul 17 2015 – Crowdfunding was heralded as a potential source of billions of dollars of financing for developing countries by experts and policy-makers at a global conference in Ethiopia this week.

Jamaica’s Minister of Finance, Dr Peter Phillips, told a side-event at the United Nations Financing for Development conference in Addis Ababa that crowdfunding – where ordinary citizens invest small amounts of money in businesses, social projects or charitable causes – could be a “genuinely exciting” way of “democratising finance”.

“We would like very much to look at the possibilities of what could occur using crowdfunding,” Dr Phillips, the co-chair of the panel discussion, said.

“Access to affordable financing is of central importance, especially if we are to satisfy the development goals which are the heart of this conference. There is the prospect of crowdfunding being a viable solution for helping Jamaica, and other countries, channel financing to small and medium enterprises to grow private sector investment,” the Minister said.

The panel was co-chaired by Commonwealth Deputy Secretary-General Deodat Maharaj, who began by setting out the huge potential of crowdfunding to help plug a gap in funding international development goals, which cannot alone be met by established revenue streams.

“For 2014, the total amount of financing raised through crowdfunding amounted to $16 billion. This year it is projected to reach $34 billion. By 2020, the World Bank estimates that developing countries alone will raise $90 billion,” Mr Maharaj said.