Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

Finance insight with Mekupi Kambatuku – Crowdfunding models for flexible financing

Home Agriculture Finance insight with Mekupi Kambatuku – Crowdfunding models for flexible financing
Finance insight with Mekupi Kambatuku – Crowdfunding models for flexible financing

In the previous two articles, we spoke of things to consider when taking a loan. As a complement to that, we will look at the new trend of crowdfunding in agribusiness, what it entails, the options, and the risks involved. This will be shared in four parts.

We have witnessed how the world is moving towards collaborative initiatives. It has become imperative that we form conglomerates in business, hold hands and bring resources together for the betterment of our communities and to enhance our contribution to the Namibian economy. Going a step back to last week, perhaps instead of considering loans, we should look at more alternatives that give us access to finances for our farming investments and operations. 

Perhaps we need to look at the comparisons of equity vs debt. Most of us tend to go straight to debt when considering sources of finance. We barely think of equity options. The new trend, perhaps not in our spaces yet, is the option of developing crowdfunding as an investment option. Simply stated, it is bringing up resources together to invest in a project or a business as one. Is this an option for us and what does it entail?

Say you want to buy a farm worth N$7 million. However, you have little to no funds. So, you find 10 people as a group of friends/investors to each invest N$700 000 to be able to afford the farming project. This can provide entrepreneurs with a great start on costly projects, or speed up the development of the product process, and invest in the business growth by creating access to several investors. 

This might also come with knowledge resources, which may pose an added value to the business. Crowdfunding makes it possible for agricultural projects to reach more people and help expand a project’s capital structure with more legal and creative ways of investment.

This type of investment has the potential to contribute to the agricultural sector in many ways. As we all know, agribusiness requires a hefty amount of money that may at times exceed the threshold of many investors. 

This also provides an opportunity for more people to participate in the great potential of agribusinesses. Remember, “green is the new gold”. Crowdfunding may close the gap between the Cost of Capital (Debt vs Equity). 

Part 2 to follow next week, be on the lookout.

 

Disclaimer: Crowdfunding is not to be confused with pyramid schemes.