The European online alternative finance market grew 92% to €5.4bn in 2015, according to the second annual survey by the Cambridge Centre for Alternative Finance, in partnership with CrowdfundingHub, KPMG and supported by CME Group Foundation.
The report entitled ‘Sustaining Momentum‘, had the support of 17 major European industry associations and research partners, and was based on data from 367 crowdfunding, peer-to-peer lending and other alternative finance intermediaries from 32 European countries – capturing an estimated 90% of the visible market. (For more details on Alternative Finance in Europe, see ‘Current State of Crowdfunding in Europe‘, with the Alternative Finance Maturity Index.).
The United Kingdom was by far the largest in Europe at €4.4bn, followed by France at €319m, Germany at €249m and the Netherlands, €111m. Other large European markets include Finland with €64m, Spain at €50m, Belgium at €37m and Italy at €32m. The Nordic countries collectively accounted for €104m, while Central and Eastern European countries registered a total of €89m.
Excluding the UK, the European alternative finance market grew by 72% from €594m in 2014 to €1.019bn in 2015.
Peer-to-peer consumer lending is the largest market segment of alternative finance, with €366m in Europe in 2015. Peer-to-peer business lending is the second largest segment with €212m, with equity-based crowdfunding in third with €159m, and reward-based crowdfunding fourth at €139m.
P2P business lending biggest in the Netherlands
Online alternative business funding increased by 167% year-on-year to €536m raised for over 9,400 startups and SMEs across Europe. In 2013, €117m was raised by businesses. This increased to €201m in 2014 (+72% growth), and to €536m in 2015 (+167%).
The Netherlands is (after the UK) the largest market for peer-to-peer business lending (74 million in 2015, a growth of 34%).
- Estonia ranked first in Europe in alternative finance volume per capita at €24, followed by Finland at €12 and Monaco at €10 outside of the UK.
- Institutionalisation took off in mainland Europe in 2015, with 26% of peer-to-peer consumer lending and 24% of peer-to-peer business lending funded by institutions such as pension funds, mutual funds, asset management firms and banks.
- Across Europe, perceptions of existing national regulations in alternative finance are divided. About 38% of surveyed platforms felt their national regulations for crowdfunding and peer-to-peer lending were adequate and appropriate, 28% perceived their national regulations to be excessive, and a further 10% said current regulations were too relaxed.
- The biggest risks perceived by the alternative finance industry are increasing loan defaults or business failure rates, fraudulent activities or the collapse of platforms due to malpractice.
The full report can be downloaded here.
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