Joe Njoroge and the team developing an equity based crowdfunding platform that enables business owners to pitch.
Equity Crowd Funding Financial Services Ltd based in Kenya. In equity projects, investor buy shares and equity amount is captured by end date/goal reached of the project.
Dr. Joseph M. Njoroge, a lecturer at Murang’a University College, founder of Equity Crowd Funding Financial Services Ltd. He holds a PhD degree from the University of Hamburg, Germany. Dr. Njoroge has vast experience in tourism and hospitality operations both locally and abroad. Since 2010 he has been teaching tourism and hospitality management courses at the university level. He has also been involved in research and consultancy work. He has started to think about developing an equity based crowdfunding platform from his own experience with the banks.
Joe says “When I came back to Kenya from Germany I had one thing in mind- To start a business in Travel Agency business. With my knowledge in tourism I had identified a gap and in the process of setting the business I needed some capital. I approached a bank and I was declined a loan because I didn’t have some form of security. This is the story of every youth in Africa.”
There are three critical problems in capital financing: Financing start-ups, ongoing operations, and real estate projects.
Getting capital for new start-ups among the youth has proven to be an uphill task. While banks provide an opportunity for loans, in order to secure them a form of security is needed. Brilliant fresh graduates with business ideas and or projects may have no ability to access such loans.
On the other hand there are ongoing businesses with proven track record of good returns and have foreseen an opportunity for growth only if a little more capital would be injected into their businesses. However, they may not be able to maintain a vibrant growth if a significant amount of capital is not invested into their operation.
The third problem is real estate project financing. Currently, real estate sector is booming. It provides an opportunity for high return on investment. However accessing capital for new real estate developers can be very hard because of the need for the developers to prove their ability of repaying the bank loans. Considering real estate developments are capital intensive, adequate financial support must be sourced.
To solve these three problems of capital financing and to beat the banks they will employ the power of the ‘CROWD’ as exhibited by the successes of Kenyan cooperative movements and Savings and Credit Cooperative (SACCO) and through web based platform that enables investors and project owners to ‘meet’.
They are employing a web based platform that enables angel investors to brows different projects and pitches on offer for their consideration. Project owners will be able to put up their idea on the web, add their video pitch, offer a reward in form of equity stake in the company or payment of interest.
For example, a new start-up business that needs ksh. 100,000 would pitch the idea on the web and may offer a 10% stake in the business or payment of 10% interest to investors. Therefore capital sourcing through crowdfunding would still be cheaper than the bank options and would provide a reasonable return on Strictly Private & Confidential investment to backers of the projects which is a better option that putting money in a fixed account that would attract a 3% interest.
Start-ups Crowd Funding
This is a crowd funding investment option for new start-up companies.
Mini bonds will provide an opportunity for investors to put their money for a pre-determined reward either a stake in the company or some interest. MINI BONDS are low risk investments options unlike start-ups which are high risk ventures but may also have high rates of return.
On the other hand real estate developers can provide DEVELOPMENT BONDS for investors who have an interest in real estate ventures. This type of investment will provide a more secured low risk investment opportunity for investors.
Equity system has been built to provide more control for the project owners to campaign for their projects through social media. It also secures investors interest such that money is normally not deducted for their accounts upon pledge but once the project has reached its target.
“Our source of income will be through project listing where we shall charge 1% of the requested funds, 5% commission of the realized amount and through independent financial and venture analysis of projects. We are hereby requesting USD 5000. We believe the market is ripe for crowdfunding considering the high rates that are charged by local banks on loans and the requirements that banks request for projects to be considered” says Joe.
Equity crowdfunding platform is operational and can be accessed through www.equitycrowdfunding.co.ke. They have a team of 7 members behind the project who are currently putting up operational structures.
For more information, please visit Equity crowdfunding’s Indiegogo page: