Crowdfunding Surge in Mexico Opens Opportunity for Nonprofits and SMEs

By Débora Montesinos, HIPGive contributor

In four years, crowdfunding has grown 245 percent in Mexico

Crowdfunding is in Mexico to stay—not only have foundations and nonprofits adopted it, but it’s also become a favorite of small and medium businesses that lack access to credit. Between 2011 and 2015, crowdfunding grew 245 percent, according to the Secretariat of Finance and Public Credit, which predicts that growth will continue in line with the global increase in crowdfunding.

Measuring Realities

Studies on crowdfunding have found that in 2014 there were 1,250 platforms throughout the world. Of them, 600 operated in Europe, and 375 in North America. Overall, the promising industry went from raising $6.1 billion in 2013 to $16.2 billion in 2014, to $34.4 billion in 2015. This year, it’s taken for granted the industry will continue to grow.

In contrast to this, crowdfunding in Mexico is at a very early stage, although we’ve already seen the potential for growth. Between 2011 and June 2015, the numbers of investors increased an average of 245 percent per year, according to official reports.
During that period, Mexican crowdfunding campaigns funded 4,081 successful initiatives, which received 256 million pesos—around $13.13 million dollars—thanks to 53,276 investors.

The Mexican authorities identified 16 national platforms and four foreign ones which mostly fund business owners, although some sporadically fund philanthropic activities as well.

The four largest platforms—Fondeadora, Crowdfunder, Prestadero, and Kubo Financiero—represent 96 percent of the Mexican market. (And, of course, there’s also us at HIPGive!)

New Possibilities

The general perception is that crowdfunding platforms are a positive development, since they encourage financial inclusion and electronic payment methods: at least 63 percent of platforms worldwide use Paypal as a payment method, and 45 percent ask investors to transfer resources into deposit accounts.

Here at HIPGive, we’re obviously thrilled about the rise of crowdfunding, and we see amazing potential to be able to support nonprofits throughout Latin America through small individual donations. Check out some of our current crowdfunding campaigns below!