The University of Cambridge has announced new benchmarkingresults that show the European alternative finance market as a whole grew by144% last year from €1.21 ($1.37) billion to €2.96 ($3.35) billion in 2014.According to the research, the UK is by far the largest market for alternativefinancing with it accounting for €2.3 billion of the €2.96 total.
Following the UK, France and Germany had the largest onlinealternative finance industry, but according to a per capita basis, Estonia hasthe second largest online alternative finance industry highlighting therelative broad reach of the alternative financing market in Europe. In terms ofthe alternative finance models, peer-to-peer consumer lending is the largestmarket segment in Europe, with €274 ($309) million in 2014; reward-basedcrowdfunding recorded €120 ($135) million, followed by peer-to-peer businesslending €93.1 ($105) million and equity-based crowdfunding €82.56 ($93) million.
According to the authors of the report, “Including the UK,the overall European alternative industry is on track to grow beyond €7,000m in2015 if the market fundamentals remain sound and growth continues apace.”
The growth in the European alternative finance market issignificant as traditional lenders are still reluctant to lend at levels seenprior to the global economic and financial downturn. In the UK in particularthe success of certain providers like Funding Circle has even led to thegovernment and many leading lenders to partner with the organization in orderto fill the lending void. Moving forward, one can expect that the alternativefinance market in Europe and globally will continue to post robust growth ratesin the years ahead.
Overview by Tristan Hugo-Webb, Associate Director, Global Payments for Mercator Advisory Group
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