Challenges

Babyloan Mali is a digital crowdfunding platform connecting solidarity investors from the Malian diaspora in France with young rural micro-entrepreneurs in Mali.
Funded by IFAD, the Babyloan crowdfunding platform promotes migrants’ investment in rural micro enterprises back home, with the aim to fostering the economic integration of young Malians so that to offer them an alternative to migration, particularly in rural areas. In parallel, it offers an affordable investment option to the Malian diaspora.
The programme is linked to an IFAD’s programme in Mali which provides vocational training, integration and entrepreneurship support project for rural youth (FIER).

Primary target

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Description of Innovation

Babyloan is the second crowdfunding platform in the world in social microcredit in terms of funds raised, mobilizes non-remunerated solidarity micro-loans which make it possible to finance microfinance institutions (MFIs) involved in the financing of projects of young micro-entrepreneurs (506 youth entrepreneur of which 45% are women).

The Babyloan Mali project provides seed capital to young rural entrepreneurs in Mali who have no assets. This enables them to build their income-generating activities and microenterprises. The platform links lenders and entrepreneurs through the crowdfunding model, which leverages the power of digital technology to collect small amounts of money from large numbers of individuals.

Babyloan makes the money collected available to rural entrepreneurs on the ground through the local MFI. This mechanism allows the MFI to reduce its refinancing cost, enabling it to offer a more attractive interest rate to fledgling rural businesses. Thanks to this approach, the project provides non-expensive capital to MFIs to indirectly support productive investments in poor countries. Babyloan is a not-for-profit business, which charges MFIs a low interest rate.
a crowdfunding platform for diaspora to invest in rural MSMEs in Mali

Results

- 324,000 euros raised in France and lent to rural Malian microenterprises in 5 years.
- 506 Malian entrepreneurs financed through the crowdfunding platform in 3 years, of which 45% are women, through average loans of 600 euros

Lessons Learnt

Diaspora is looking for investment solutions to participate in the development of their country, which are sharply design for their use. To do so, it is crucial to consider that :
• Build confidence is a must. Diaspora community organizations and leaders should be involved and engaged since the very beginning in order to get their support
• Social and economic impact is an essential component of an investment for the new generation of migrants who is willing to showcase solidarity in a less assisting and more productive way than the previous generation
• Target specific area of origin of the diaspora is key to boost diaspora on boarding, because it is where they are most interested in helping
• A specific marketing and communication strategy is necessary to reach the different segments of the diaspora dispersed in the host country(ies)
• Communication is the key: diaspora want regular feedback.

The French regulatory regime for crowdfunding which allows internet platforms to collect financing for businesses, via either loans or issuance of securities, was instrumental for the appropriate functioning of the crowdfunding platform in France and the marketing exercise with the Malian diaspora community in France.