Millions of ngultrum has poured in from individuals and institutions in a show of solidarity and gratitude to the country’s Covid-19 relief fund.
Given the need for funds to sustain measures against the pandemic, majority of the contributions made are voluntary. However, besides the overwhelming donations, there are a few individuals who are still unaware of the procedures involved in contribution.
Many have approached Kuensel seeking suggestions if their donations should go to the Prime Minister’s Office or the health ministry. While all donations made would be used for any Covid-19-related activities, many remain uninformed.
Crowdfunding could come as a solution to this.
The concept of crowdfunding is similar to the customary models of constructing a house in villages, where the whole village comes to provide voluntary labour and the host treats them to a feast.
Initiated as an alternative financing model for startups, new business ventures and cottage and small industries in the country less than a year ago, the Royal Securities Exchange of Bhutan Ltd (RSEBL), the platform providers, has successfully completed a donation-based crowdfunding campaign for Ability Bhutan Society.
The campaign that ended yesterday raised Nu 724,212 against the target of Nu 700,000 to provide early intervention services to children from economically disadvantaged background with disabilities.
A total of 106 donors contributed in the campaign that began on February 21. A group of tourist through a tour company also donated more than Nu 400,000.
How does crowdfunding work?
Bhutan Crowdfunding, a digital platform developed by RSEBL allows business firms (CSIs and entrepreneurs) to raise small amount of funds from a large number of individuals while providing new investment avenues for the public.
There are currently two types of crowdfunding provided in the country. An equity-based crowdfunding is an investment platform, similar to buying shares. Investors would be rewarded with returns on the equity, should the business prosper.
And there is donation-based crowdfunding, where there is no monetary return on the investments and is mainly organised for charity purpose.
Covid-19 and crowdfunding
In the wake of the Covid-19 crisis, a global trend, in response of the pandemic is the coming up of multiple crowdfunding platforms as an opportunity for fund raising.
While the government has opened a Covid-19 relief fund account, nobody is aware of how the fund is being utilised.
RSEBL’s chief executive officer, Dorji Phuntsho, said that using the crowdfunding portal, interested parties could make donations online. He said that crowdfunding campaigns are more transparent in the sense that people would know how and where their donations would be utilised once the contributions are made.
The list of donors would also be reflected at the end of the campaign period, which would normally be decided by organisers.
It would be more demonstrative – using audiovisuals contents and detail on the corwdfunding objectives to convince the donors. “We would also have better outreach since it would be carried out digitally through social media platforms.”
He said that RSEBL started the corwdfunding given the potential social media platforms had on the emotions of people. “Today there are a lot of posts online where people seek financial assistance from the crowd with different motives,” he said. “However, we cannot for certain say those posts are genuine and people could misuse such platforms.”
The CEO added that when it comes to crowdfunding, the RSEBL as an institution validates all the objectives through a strict criterion before making it public.
He said that RSEBL had unofficially informed relevant agencies to start a crowdfund for Covid-19 when the disease had initially entered the country. “As a platform provider, we have a conflict of interest to launch the campaign on our own.”
The company has not received any response so far.
Dorji Phuntsho said that the ultimate objective of the campaign is to reach out to all people who want to donate.
Meanwhile, he said that the company is also preparing to bring on board international donors. “We are working with the banks to open link for payment gateway. We should be done by next week or so.”