Marketplace (Peer-To-Peer) Lending Trends – Europe

Jul 29, 2016 Blog  Lending , marketplace , Peer-to-Peer

 

No longer is crowd and peer to peer financing activity seen as a tiny niche with little prospect of impacting the larger financial system.

The European alternative finance market grew by 144% as a whole, from €1.211m in 2013 to €2.957m in 2014. This market, excluding the UK is estimated to have delivered €385m worth of early stage, growth and working capital financing to 10,000 European start-ups and SMEs from 2013-2015, of which €201m was funded in 2014 alone.

Currently there are hundreds (if not thousands) of online alternative finance platforms in Europe that are facilitating millions of euros’ worth of transactions every day for individuals and businesses equally.

The United Kingdom, as an innovative leader in alternative finance, dominates the European market with some of the most advanced online platforms and sophisticated alternative finance instruments.

Although the growth rate for markets as a whole slowed to 83% in 2014, the European alternative finance market grew by €282m to reach €620m. 115% is the three year average growth rate for the European market.

The top five European countries regarding cumulative alternative finance between 2012 and 2014 posted €925m, which is about 6.7 times more than the combined total of the rest of the 21 European countries added together (€142.21m).

Peer to peer consumer lending where individual borrowers obtain mostly unsecured personal loans from a number of individual lenders through an online marketplace, is the biggest segment in the European alternative finance market (excluding the UK). It has developed swiftly from €62.52m in 2012 to €157.14 in 2013 and €274.62m in 2014.

Peer to peer business lending is also fast developing in a number of key markets. The number of startups and SMEs funded through online alternative finance platforms has been growing at an even faster rate of 133%, from just over 1000 funded businesses in 2012 to 5801 in 2014.

An ecosystem of fintech companies is emerging and providing services to both alternative finance platforms and investors. You can read the full report here.

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