Crowdfunding guidelines to boost SMEs in pipeline

THE Capital Markets and Securities Authority (CMSA) will soon release guidelines on crowdfunding in efforts to help Small and Medium Enterprises (SMEs) to access capital for growth.

Crowdfunding is a way of raising money to finance projects and businesses. It enables fundraisers to collect money from a large number of people via online platforms.

“In the next few weeks, we will issue guidelines on how to use the crowdfunding because this arrangement has benefits,” said Mr Alfred Mkombo, CMSA’s Director of Research, Policy and Planning.

He was speaking in Dar es Salaam at a seminar for SMEs, on how they could benefit from crowdfunding and get an understanding on the capital market issues.

crowdfunding is most often used by start-up companies or growing businesses as a way of accessing alternative funds. It is an innovative way of sourcing funding for new projects, businesses or ideas.

The seminar was organised by the CMSA in collaboration with the European Union (EU).

The EU supports the CMSA in developing the crowdfunding guidelines, which is also expected to facilitate financial inclusion in the country.

Mr Exaut Julius, who made a presentation on capital markets, told the participants that the capital markets are important for their businesses.

He said currently the total value of investment in the capital markets increased by 18.3 per cent to reach 35.3tri/- from 29.9tri/- in 2021.

Combined trading turnover of equities and bonds also increased by 40.1 per cent to 6.4tri/- from 4.6tri/- recorded in the corresponding previous period.

The trading turnover of bonds also increased by 83.2 per cent to 6.1tri/- from 3.4tri/- recorded in the corresponding previous period.

Moreover, the Net Asset Value of Collective Investment Schemes increased by 155.28 percent to 1.42tri/- from 557.28bn/- recorded in the corresponding previous period.

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