2016 European Alternative Finance Industry Survey | KPMG | GR

Sustaining momentum: 2016 European Alternative Finance Industry Survey

2016 European Alternative Finance Industry Survey

The European online alternative finance market grew 92% to EURO 5.4 billion in 2015, according to the second annual survey by the Cambridge Centre for Alternative Finance, in partnership with KPMG and supported by CME Group Foundation

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The European online alternative finance market, including crowdfunding and peer-to-peer lending, grew by 92% in 2015 to €5.431 billion, according to the results of the 2nd Annual European Alternative Finance Industry Survey conducted by the Cambridge Centre for Alternative Finance at University of Cambridge Judge Business School, in partnership with 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 per cent of the visible market.

The United Kingdom was by far the largest in Europe at EURO 4.4 billion, followed by France at EURO 319 million, Germany at EURO 249 million and the Netherlands, EURO 111 million. Other large European markets include Finland with EURO 64 million, Spain at EURO 50 million, Belgium at EURO 37 million and Italy at EURO 32 million. The Nordic countries collectively accounted for EURO 104 million, while Central and Eastern European countries registered a total of EURO 89 million.

Excluding the UK, the European alternative finance market grew by 72% from EURO 594 million in 2014 to EURO 1 019 billion in 2015.  “Although the absolute year-on-year growth rate slowed by 10%” (from the 82% growth excluding the UK between 2013 and 2014) the industry is still sustaining momentum with substantive expansion in transaction volumes recorded across almost all online alternative finance models,” the report said.  Peer-to-peer consumer lending is the largest market segment of alternative finance, with EURO 366 million in Europe in 2015.  Peer-to-peer business lending is the second largest segment with EURO 212 million, with equity-based crowdfunding in third with €159 million.

Among other findings:

  • Online alternative business funding increased by 167% year-on-year to EURO 536 million raised for over 9 400 start-ups and SMEs across Europe.  -   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.  

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