With the rise of technology, entrepreneurs around the world, including in Ghana, have been increasingly using crowdfunding—sourcing small amounts of money from large numbers of people through digital platforms—to raise capital via their social networks. This novel approach to financing offers significant potential, especially for small and medium enterprises (SMEs) that often struggle to access appropriately-sized capital investments.

In Ghana, a country with a clear vision and proactive approach toward innovation policy, efforts to issue specific regulatory frameworks for the crowdfunding sector have been underway since 2021. First, the Bank of Ghana issued a Policy to guide the use of crowdfunding in the banking sector. In 2022, the Security and Exchange Commission (SEC) issued draft Guidelines for a model of crowdfunding known as “investment crowdfunding,” which involves raising business capital from the public using instruments such as debt and equity.

Under the Boosting Green Employment and Enterprise Opportunities in Ghana (GrEEn), funded by the European Union Emergency Trust Fund (EUTF) for Africa, the United Nations Capital Development Fund (UNCDF) sought out opportunities to support the private sector in creating a more vibrant market for crowdfunding and to bridge the local SME financing gap. Upon exploring the Ghanaian SME ecosystem, UNCDF recognized that the promise offered by this technological and market-driven innovation could only be realized within a more mature and more conducive regulatory framework. As a result, UNCDF engaged with the sector’s regulators, the Bank of Ghana and the SEC to inform the finalization and promote the adoption of the SEC’s investment crowdfunding Guidelines, thus protecting investors and fund recipients while enabling the private sector to build new financing models and crowd in capital to support excluded segments.

To do this, UNCDF, in partnership with Lelapa African FinTech Advisory, leveraged its convening power and role as an ecosystem facilitator to hold consultations with the private sector and to incentivize public-private dialogues and peer-to-peer exchanges. This participatory approach helped to strengthen the formulation of the Guidelines through discussion of best practices, ensure that they reflect the interests of all parties and the risks of the business environment, broaden the sense of ownership among stakeholders, and encourage uptake.

This technical brief summarizes the activities, insights and lessons learned from UNCDF and Lelapa’s technical assistance. It also offers best practices for supporting regulators in designing inclusive regulatory frameworks that can pave the way for innovation in the SME finance space.