Crowdfunding is ‘buzzing’ all over Europe but in Malta, it is still rather dormant, according to Malta Business Bureau president Mario Spiteri.

Speaking during a seminar organised as part of SME Week, he noted that so far, few sought to use crowdfunding to finance their business initiatives.

“The Malta Business Bureau believes now is the opportune time to put this instrument on the local credit map, and discuss how it can further support enterprises in Malta,” he continued.

A total of $2.7 billion was raised through crowdfunding in 2012, helping 1.1 million campaigns. This represents an increase of 81 per cent over the previous year. And the growth is continuing: in Europe alone, last year €2 billion was raised.

The seminar was addressed by European Crowdfunding Network (ECN) president Oliver Gajda who said there were different models of crowdfunding, ranging from donations and reward-based, to lending and equity.

Crowdfunding can serve as a financing instrument for innovative and creative projects that usually find it hard to secure traditional financing such as bank loans.

Even though the schemes primarily work by having a large number of small donation, thereby spreading the risk, regulation is still important, and the ECN is pushing the European Commission to adopt pan-European regulation.

The presentation was given in the context of a debate aimed to explore Malta’s potential to attract and nurture start-ups, particularly through business incubation.

A number of proposals have been made to the government by representatives of the various business incubation centres, for inclusion in the forthcoming Budget.