The European market for online alternative finance grew by 144% last year to almost €3bn and could hit €7bn this year as companies look to tap into new sources of capital, according to a new report published by the University of Cambridge Judge Business School and professional services firm EY.
The report illustrates that the once small sector is expanding rapidly and many businesses and individuals are taking notice. The rise of the sector is a direct impact of mainstream institutions simply not meeting consumer demands. Investors are looking for higher rates of returns than that being offered by high street lenders and borrowers are seeking finance and are finding that the banks are not lending at the levels required. It is evident that the mainstream lenders are not lending due to the hit that they took in the financial crash, however lenders and borrowers alike are ready for a serious shift in the process offered. Peer-to-Peer lenders such as Wellesley & Co. are stepping in to fill this void.
Alternative finance is spreading across Europe and currently the UK dominates the sector with a €2.34bn market share. Followed is France at €154m, then Germany with €140m, Sweden at €107 and the Netherlands with €78m are the smallest. Andy Baldwin, chairman of global financial services at EY, said: “The UK market’s success has in part been driven by investors’ search for yield after the Bank of England’s quantitative easing program, so it will be interesting to see if the EU’s recent QE program sparks increased activity in Europe.”
Wellesley & Co. is an asset backed Peer-to-Peer lender that offers high rates of return. Wellesley specalise in UK lending but are keen to look at opportunities within Europe and find it encouraging that the alternative finance industry is growing from strength to strength in the EU and will develop with the shift.