Crowdfunding can serve as a catalyst to attract local investor support for SMEs in Kenya and across other markets in Africa.

This is according to Matt Roberts-Davies, General Manager at crowdfunding platform M-Changa, who said: "The global crowdfunding market is larger than the VC funding market," adding that the trend has the potential to quickly gain momentum across Africa.

"With this trend attracting funding from strangers through equity sale ... (it) could add an option in the investment market," said Roberts-Davies.

With investment clubs and traditional communal fundraisers emerging across Kenya, the M-Changa executive suggests that the crowdfunding market is far bigger than initially thought.

According to Roberts-Davies a quasi-equity model in which entrepreneurs offer an amount of profit to to investors to help launch a product or service could stimulate investor appetite in the market.

These amounts could support SMEs in their quest to gain market ground and simultaneously encourage investor culture. However, this is subject to successful projects and benefits for individual funders.

GlobalGiving partnership

M-Changa has entered a partnership with GlobalGiving, a global crowdfunding platform for non-profit causes. The partnership will see donors sending funds in Kenya Shillings using M-Changa's platform, encouraging local giving.

"This is an important milestone for GlobalGiving because it will open up new fundraising possibilities for our nonprofit partners in Kenya," said Mari Kuraishi, GlobalGiving Co-Founder and President. "When our partners can connect with donors from their own communities, as well as with donors around the world, their sustainability and impact increases."

A statement from GlobalGiving said that US$4.6 million has been raised on the platform for Kenyan based projects since 2002. Kenyan donors in turn have only donated US$50,000 to date, an amount the company says will grow with the new partnership.

M-Changa has 300,000 unique users on its platform, managed 24,000 fundraisers to date and raised "millions of dollars" since 2012.