According to the World Bank, the crowdfunding market’s potential is more than 96$ Billion by 2025.
This type of funding has taken place in recent years, it allows entrepreneurs to fund their projects, and it’s also an opportunity for them to communicate their products to their target audience.
In Morocco, crowdfunding models generally are based on donations, and they are still in their infancy.
In 2014, the launch of the first crowdfunding type of donation with rewards for social and cultural projects in Morocco happy smala, it’s a laboratory that experiments with collaborative approaches and new technologies to create high-impact innovation.
In 2015, the launch of Cotizi which is the first free and secure service dedicated to collecting donations and launching online petitions in Morocco and the MENA region.
happy smala and the Moroccan Center for Innovation and Social Entrepreneurship (MCISE) launched the pre-sales platform Wuluj in 2017, which offers all MENA regions the opportunity to market their product or services at least at the prototype stage.
In 2019, the launch of Flowingo was a platform for connecting entrepreneurs and investors, which has just been launched in Morocco to position itself on crowdfunding. Also, Morocco’s Financial Market Authority (AMMC — Autorité Marocaine du Marché des Capitaux) introduced regulations for crowdfunding platforms to operate legally in the country. These regulations aimed to provide a legal framework for crowdfunding activities and to protect investors.
Dealkhir that has been launched in 2020, and it’s a donation platform.
In February 2021, the highly anticipated bill n°15–18 relating to collaborative financing was voted unanimously in Parliament.
According to the supervisory ministry, the establishment of this legal framework is part of the efforts of the Public Authorities aimed at strengthening the financial inclusion of young project leaders and should contribute to the mobilization of new sources of financing for the benefit of very small, small and medium-sized businesses and young leaders of innovative projects.
Furthermore, the active participation of potential donors in national development projects should be made possible through simple, secure, and transparent financing mechanisms.
However, even if this article is now in force, there is still much to be clarified in future regulatory texts, particularly about the conditions for implementing this method of financing.
In 2022, a new version of the Crowdfunding Barometer, which includes Moroccan projects financed between 2019 and mid-2021, was published through a partnership between happy smala and ESSEC Afrique.
In September this year, The Moroccan Capital Market Authority (AMMC) uploaded through its website a portal dedicated to crowdfunding.
This portal was created to support future players in collaborative financing in the process of obtaining platform approval, as well as to facilitate the understanding of this new method of financing by the general public.
What’s Next for the Industry?
Crowdfunding has the potential to play an important role in developing the dynamism of Moroccan entrepreneurship.
Also, there are other alternatives like venture capital, when we find Morocco as one of the emerging regions in the MENA region. With an ecosystem of $15M in 2023.
And we have already seen strategies like the Maroc Numeric Fund, and the Innov Invest Fund, which is an initiative launched by the Moroccan government the World Bank, and the Morocco Guarantee and SME Finance Corp (CCG). It has raised $70 million in equity funding for startup investments and has funded 230 startups and projects, primarily through grants and low-interest loans.
What they have achieved it’s not the ideal goal but they are in the making to help startups raise their fund.
To develop the crowdfunding ecosystem, it is now time to lay the foundations for future platforms and support their launch through three key areas that will make a difference. These are a successful targeted communication campaign via social networks, a clear project vision for stakeholders, and finally a reflection on the successful examples of crowdfunding around the world.
Bottom line
Crowdfunding improves access to financing for small and medium-sized businesses, particularly those that have difficulty accessing bank loans and other financing methods. The main advantages are the absence of guarantees and rapid financing.
The potential seen in crowdfunding is an opportunity to establish a bridge position and make it easier for entrepreneurs to cross this stage of death.