It’s entrepreneurship season in the Caribbean. Lately, more and more Caribbean governments are realizing the importance of a healthy environment for self-sufficiency and are slowly trying to do what they can to help facilitate that. But as always, our bottom-line concern in this region seems to be funding. It’s hard, even at a government level to find the money to support young businesses, even though we’re all agreed that it should be a top priority. But this problem isn’t unique to the Caribbean region. Entrepreneurs around the world have issues finding funding and that’s where one of the most popular money-models for small businesses and projects came in: crowdfunding.
Crowdfunding is simply a collection of money from multiple backers who have agreed to support a project or business idea either on a lending or donation model. Sites like Kickstarter, Indiegogo and GoFundMe have become famous for helping out some awesome projects around the world by a wide range of entrepreneurs from film makers and musicians to techies and social activists. So the question is, why don’t we see more crowdfunding attempts in the Caribbean? There are plenty of social welfare groups, educational institutions, small businesses, agricultural workers, scientists and students who have great projects and business ideas in the Caribbean. We know this because of the wide array of the participation we see in Startup events like Startup Weekend in Jamaica and Trinidad and Digital Jam 3.0. But how may of these dreamy eyed entrepreneurs actually take their businesses off the ground after these events? The number is small and the key factor in that is lack of funding.
That’s why we were happy to discover that a crowdfunding platform has actually been launched in the Caribbean recently by Jamaica National Bank in 2013. Launched to service Jamaican SMEs iSupport Jamaica was launched by the the company’s micro-financing body JN Small business Loans Limited (JNSBL) and philanthropic arm JN Foundation. They offer micro-entrepreneurs access to a global funding portal, made up of donors and lenders from Jamaica and the diaspora.
The site operates like most crowdfunding platforms, offering both giving and lending options for people interested in contributing to projects. So not only is this a great opportunity to fund your small business, but people who are interested in contributing to Jamaica’s development but are unable to launch their own projects, can support someone else in doing so.
What’s really excellent about this is that it focuses on community support as an integral part of development. So instead of holding out for a handout from the government (who either can’t afford it or don’t care), or giving into financial limitations, a community can source money to fix a basic school, or build a playground, or an individual can get that one piece of equipment he needs to set off his business.
Some of the projects are really cool and are slowly getting the support they need from the community. However, this is a Jamaican platform designed to assist Jamaicans. It’s also part of the bank’s specific marketing strategy. This is a good model for how a regional-based model can be designed to assist Caribbean entrepreneurs. Not only would we have an additional funding source, but there’d be room for collaborative relationships to be developed. Through a Caribbean Crowdfunding platform, people can discover projects similar to theirs and seek to partner or build mutually beneficial relationships.
In order to be scaled up, a few things would need to be adjusted though.
Here’s one suggestion: Encourage fund seekers to make their venture more attractive by offering some sort of equitable exchange. So in exchange for donations to help upgrade my barber shop, donors get discounted services. With the prospect of getting something back, even if it’s just symbolic, like a plaque on the wall, lenders and givers would be more encouraged to keep checking the site for more opportunities to contribute. This also establishes a bond between both parties that lasts beyond the duration of the project, which may help profitable entrepreneurs with sustainable business. So not only did I donate money to help a small restaurant get new furniture, but they named a sandwich after me, so I’ll be sure to eat there and send my friends there as well!
Another suggestion: At a regional level, the act of giving would need to be more attractive. Here’s how: If I give to a project, and encourage/refer my friends to give as well, I can earn some form of reward based either on the amount of money I’ve attracted to a project or the number of other donors. This can also be applied on the basis of number of projects I’ve supported myself. So once I’ve supported a number of projects, resulting in a total contribution of $XXX.XX, I am rewarded/recognized in some way.
Jamaica National has provided a a fantastic model for a shared development experience that can be scaled up to a regional level. Crowdfunding facilitates entrepreneurship in a simple and realistic way and could be the next big answer for the Caribbean entrepreneur.