Unboxing crowdfunding for development in Moldova
Already used to the idea of crowdfunding campaigns, periodically attracting attention of and mobilizing people, communities across the country are wondering which platforms and ways to raise funds are viable.
This is why the United Nations Development Programme (UNDP) has started reviewing the existing options in the Republic of Moldova for communities, non-governmental organisations, including home town associations, as well as individuals.
The main conclusions of the study were:
- Currently, there are few tools in the Republic of Moldova that would meet all the beneficiaries’ needs, including for transfers from abroad;
- Using international platforms involves several risks, requirements, and skills that people in communities do not yet have;
- Facebook is the most simple, effective and inexpensive fundraising tool, but the Republic of Moldova is not included in the list of beneficiaries, hence people based in our country cannot initiate fundraising cases.
The study also pointed out the advantages and disadvantages of each of the identified fundraising modalities:
The fundraisers’ voices
To ensure that the study results have a practical use at the national level and to engage fundraisers, UNDP organised a discussion session, “Unboxing crowdfunding in Moldova”. Here are some of the opinions expressed and experiences shared:
Elena Druta, initiator of the “Cocostarcul se intoarce” fundraising campaign for the renovation of a well in the grandparents’ village:
“We have been thinking a lot which fundraising tool to use. I chose Facebook, but at great risk on myself. I was able to create a fundraising account on Facebook only with the help of a relative settled in Italy. It is very simple, effective and cheap, but less accessible for people based in Moldova.”
Tudor Darie, CEO and founder of ‘Fagura’, the first credit marketplace in Moldova mentioned:
“Facebook is a good solution for community crowdfunding in the Republic of Moldova.
In this regard, Facebook representatives in Romania have to be contacted to find out what are the criteria for including the Republic of Moldova in the list of the SEPA (Single Euro Payment Area) payment system’s beneficiaries, which is the basis of crowdfunding via Facebook. Then we need to fulfill those requirements one by one to give the country a simple, effective and cheap solution.”
All of the currently available solutions for the Republic of Moldova require certain banking services, either it is about dedicated crowdfunding platforms, a transfer from one card to another, or embedding the fundraising module on any institution’s website.
Natalia Iacovleva, Chief Economist at Victoriabank, notes:
“Victoriabank offers a full range of services and tools necessary to run crowdfunding campaigns, providing all the safety criteria both for systems embedded into sites and for platforms created from scratch. We remain open to collaborations and innovations.”
Community crowdfunding creates trends for impactful investments
UNDP Moldova is one of the development partners that believes in the power of crowdfunding and has used this tool in many projects. One of them is “Migration and Local Development” Project, funded by the Government of Switzerland. Guided by UNDP, 38 communities gained access to online fundraising platforms during 2015–2018. Thus, 55 community projects have been implemented with the support of the Moldovan diaspora. More than 10,000 people donated over USD 166,500 for infrastructure and socio-cultural projects in their communities.
The fact that natives from different parts of the world were engaged motivation the choice of online tools, which offer convenience, facilitate the money transfer, transparency and receipt.
The invested efforts and dedication helped prepare and educate the population on how to use crowdfunding as a way of financing local development projects:
“The 55 fundraising campaigns for community projects, first of all, played a role in educating the population, as well as in building trust among stakeholders. We continue these efforts in the second stage of the project, this time with a focus on local economic development, involving the diaspora. We strongly believe that this created the precondition for testing other crowdfunding tools, including those based on investments and rewards,” said Oxana Maciuca, UNDP Project Manager, “Migration and Local Development”.
Crowdfunding — a complex mechanism that deserves a high level discussion
Over the past three years, online fundraising for community projects has increased significantly in the Republic of Moldova. Although the results had a significant impact on the local level, an effort needs to be made to replicate this practice nationwide.
Some key questions remain: the sustainability of fundraising platforms and recommended ways to raise funds in the Republic of Moldova.
Tudor Darie: “Community crowdfunding accounts for only 5% of all types of crowdfunding. There are also rewards-based, equity-based and real estate crowdfunding — tools for developing online micro-crediting. In the Republic of Moldova there are a number of gaps hindering progress in these areas: no online microfinance services; no possibility to use a simple electronic signature; possibility to obtain a person’s consent to check personal data. We must start by changing the definition of ‘crowdfunding’ in the Law on Small and Medium-Sized Enterprises, followed by setting up a task force in the Ministry of Economy or the National Bank of Moldova, which would take stock of the existing restrictions and start working on solutions, together with the main stakeholders.”
The participants at “Unboxing crowdfunding in Moldova” agreed that joint efforts are needed to further advance crowdfunding in the Republic of Moldova. The general public and decision-makers are to be educated about the existing fundraising tools. This is how UNDP and its strategic partners are creating, step by step, a trend for impactful investments at Home.
Text & photo: Tatiana Solonari