Alternative finance is experiencing a boom worldwide

Oct 22, 2019 Blog  Alternative Finance

edntzuaxkaaevjr

 

Ten years after the financial crisis, Alternative Finance is still exhibiting strong growth.  The sector is estimated to account for almost €300 billion of inflows worldwide, with 25% annual growth and largely dominated by the Chinese (75%), followed by the United States (19%).  Europe only represents 6%, of which 60% comes from the United Kingdom.  According to the annual report of KPMG and the non-profit group Finance Participatif France, the amount raised through alternative finance has seen an increase in France year-on-year with 39% to €1.4 billion in 2018.

The 2008 financial crisis definitely pushed individuals and companies towards alternative financing solutions and alternative finance is clearly popular globally, with no sign of decreasing.  There are already 43 million investors worldwide participating in alternative finance according to the KPMG study.

Peer-to-peer lending represents the majority of alternative finance volumes globally, at 58% with the biggest players being LendingClub and Prosper int the United States.  The second-largest market, contributing about a third is business loan financing or ‘Crowdlending’.  RainFin falls into this category with finance to SMEs and corporates.

The real estate crowdfunding market is currently on 5% globally and growing rapidly.  Companies like French Wiseed, Green Rocked, iFunded, Rendity and Strockcrowd all stand out in this sector for their momentum.

Equity crowdfunding represents only 2% of the market and the charitable sector is similar in size.  The last segment, factoring services, takes up 1%.  This is where institutional investors refinance the invoices of SMEs registered on platforms such as Finanzarel, Novicap, WorkInvoice, Cashme and CashInvoice, to name a few.  This market is, however, experiencing particularly strong growth, especially in Italy in Spain where there is no banking monopoly.

It is anticipated that, by 2023, the global alternative finance market could reach €500 billion of funds collected per year – a significant sum, but still a small amount compared to the financing granted by banks.

Article written by Damine Guermonprez, Executive Chairman of Lemon Way.  Original article was published on Crowdfundinsider.com.

Related Articles