The Securities and Exchange Commission of Ghana (SEC) and the United Nations Capital Development Fund (UNCDF) have been officially launched complete instructions for equity or investment based crowdfunding in Ghana.
Details
The guidelines were developed in collaboration with key stakeholders and following extensive consultation and technical assistance support from Lelapa African FinTech Advisory.
The guidelines aim to unlock the potential of crowdfunding as a viable financing option for micro, small and medium enterprises (MSMEs) and start-ups in the country, while ensuring investor protection, providing a regulatory framework and addressing critical gaps that have hindered growth the business community.
Digging deeper
The guidelines cover a wide range of entities, including crowdfunding intermediaries, companies seeking to raise funds and foreign entities interested in operating crowdfunding platforms in Ghana.
They prioritize investor protection while encouraging crowdfunding for social and environmental impact projects. The guidelines will boost innovation and protect investors by:
- Require crowdfunding platforms to provide clear and comprehensive information about investment risks and potential returns.
- Implementing a strict licensing process to control crowdfunding platforms based on their business model, governance structure and financial stability.
- Promoting cooperation between crowdfunding platforms, banks, MFIs and investment funds to create a seamless financial ecosystem.
What they say
Rev. Daniel Ogbamey TettehDirector General of the SEC, emphasized the importance of capital market guidelines, βin Ghana, we have seen the transformative power of crowdfunding in various sectors. From agriculture to healthcare, entrepreneurs have harnessed the collective power of the crowd to bring their ideas to life.
However, the absence of a clear regulatory framework has limited the full potential of this innovative financing model. The guidelines we’ve introduced today are designed to change that. They provide a strong framework that protects investors, ensures transparency and fosters trust in the crowdfunding ecosystem. By establishing clear rules and standards, we create an environment where both investors and fundraisers can thrive.“
Arianna Gasparri, The Technical Chief, UNCDF observed, βOn behalf of UNCDF, we are very happy to have partnered with the SEC in contributing to the future of investment and innovative channels to support SMEs in Ghana. UNCDF is indeed intended to work with government and government agencies to help with the favorable conditions for the accumulation of private capital“.
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