Following the success of the Report on UK’s Alternative Finance, which last November revealed the incredible growth in the UK, University of Cambridge in collaboration with EY conducted a research on Alternative Finance in Europe. The study, called “Moving Mainstream - The European Alternative Finance Benchmarking Report” published in late February, discloses statistics on the market’s dimension, which probably are the most accurate estimates we can get at this early stage.
€2957 million. Total value of the European Alternative Finance Market in 2014. However this value includes the UK, which on itself accounts for €2337 million. This means that the rest of Europe accounts for only €620 million. Although it may seem a small amount compared to the UK, alternative finance in the rest of Europe is growing at fast speed, with an estimated growth rate of approximately 115% in 2014.
To define the European market size further, according to the report, the UK is followed by France, with €154 million market volume in 2014, Germany with €140 million and Sweden with €107 million.
The type of alternative finance which is driving Europe’s total market value is peer-to-peer lending with €274.6 million, followed by reward crowdfunding (€120.3 million) and peer-to-business lending (€93.1 million). The latter, however, is the fastest growing category with an average growth rate of 272%. In fact, many people - including EU authorities - are putting hope in this form of alternative finance, given they see it as a potential provider of debt capital for many SMEs that are having troubles in getting bank loans.
From the Cambridge University and EY Report, it emerges that Alternative Finance follows a growing trend all over Europe, led by the UK. The results are in line with what Crowd Valley last reported, that is UK is by large the biggest market in the EU and will probably remain for years to come. Only when other countries undertake the necessary reforms and actions to foster alternative fiance will the balance change.
Wardrop,R., Zhang, B., Rau, R. Gray,M. (2015). Moving Mainstream: The European Alternative Finance Benchmarking Report. Univeristy of Cambridge & EY.
About the author - Irene Tordera
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.