As February was a shorter month, loan originations fell compared to January with some exceptions. Ratesetter and Funding Circle are in a neck-and-neck race for largest volume figure this month. Prosper and Lending Club no longer publish origination data for the most recent month. I added two more services. I do monitor development of p2p lending figures for many markets. Since I already have most of the data on file I can publish statistics on the monthly loan originations for selected p2p lending services.
Table: P2P Lending Volumes in February 2015. Source: own research Note that volumes have been converted from local currency to Euro for the sake of comparison. Some figures are estimates/approximations.
The new study ‘Moving Mainstream – The European Alternative Finance Report‘ is available now (free download). The study by the University of Cambridge and EY looks at the development of p2p lending, p2p equity, crowdfunding and other alternative finance offers in Europe and compares it to the development in the UK. The very comprehensive study combined survey results from 205 platforms in 27 European countries with 50 survey responses gathered from UK platforms as part of the Nesta Study.
P2P-Banking.com was one of the research partners in this study.
Here are the main findings from the executive summary:
Since the global financial crisis, alternative finance – which includes financial instruments and distributive channels that emerge outside of the traditional financial system – has thrived in the US, the UK and continental Europe. In particular, online alternative finance, from equity-based crowdfunding to peer-to-peer business lending, and from reward-based crowdfunding to debt-based securities, is supplying credit to SMEs, providing venture capital to start-ups, offering more diverse and transparent ways for consumers to invest or borrow money, fostering innovation, generating jobs and funding worthwhile social causes.
Although a number of studies, including those carried out by the University of Cambridge and its research partners, have documented the rise of crowdfunding and peer-to-peer lending in the UK, we actually know very little about the size, growth and diversity of various online platform-based alternative finance markets in key European countries. There is no independent, systematic and reliable research to scientifically benchmark the European alternative finance market, nor to inform policy-makers, brief regulators, update the press and educate the public. It is in this context that the University of Cambridge has partnered with EY and 14 leading national/regional industry associations to collect industry data directly from 255 leading platforms in Europe through a web-based questionnaire, capturing an estimated 85-90% of the European online alternative finance market.
The first pan-European study of its kind, this benchmarking research reveals that the European alternative finance market as a whole grew by 144% last year – from €1,211m in 2013 to €2,957m in 2014. Excluding the UK, the alternative finance market for the rest of Europe increased from €137m in 2012 to €338m in 2013 and reached €620m in 2014, with an average growth rate of 115% over the three years. There are a number of ways to measure performance across the various markets. In terms of total volume by individual countries in 2014, France has the second-largest online alternative finance industry with €154m, following the UK, which is an undisputed leader with a sizeable €2,337m (or £1.78bn). Germany has the third-largest online alternative finance market in Europe overall with €140m, followed by Sweden (€107m), the Netherlands (€78m) and Spain (€62m). However, if ranked on volume per capita, Estonia takes second place in Europe after the UK (€36 per capita), with €22m in total and €16 per capita.
In terms of the alternative finance models, excluding the UK, peer-to-peer consumer lending is the largest market segment in Europe, with €274.62m in 2014; reward-based crowdfunding recorded €120.33m, followed by peer-to-peer business lending (€93.1m) and equity-based crowdfunding (€82.56m). The average growth rates are also high across Europe: peer-to-peer business lending grew by 272% between 2012 and 2014, reward-based crowdfunding grew by 127%, equity-based crowdfunding grew by 116% and peer-to-peer consumer lending grew by 113% in the same period.
Collectively, the European alternative finance market, excluding the UK, is estimated to have provided €385m worth of early-stage, growth and working capital financing to nearly 10,000 European start-ups and SMEs during the last three years, of which €201.43m was funded in 2014 alone. Based on the average growth rates between 2012 and 2014, excluding the UK, the European online alternative finance market is likely to exceed €1,300m in 2015. Including the UK, the overall European alternative industry is on track to grow beyond €7,000m in 2015 if the market fundamentals remain sound and growth continues apace.
Assetz Capital is one of the established, medium sized UK p2p lending marketplaces. Since inception they originated over 60 million GBP in loan volume. I covered Assetz Capital in when I visited them last year. How a convertible note pitch differs from a ‘normal’ equity pitch on Seedrs is described in this document.
Minimum investment is 10 GBP. The valuation cap for this convertible is 60 million GBP and the discount rate is 10% provided that the convertible shares are issued within 12 months. In the event that the convertible shares are issued after 12 months, the discount rate shall increase by a rate of 0.8% per calendar month for a further 11 months, increasing to 20% in the 24th month. The discount rate will then be capped at 20% thereafter. Continue reading →
Holding company Non-Standard Finance intends to raise around 100 million GBPÂ on the London stock market in order to acquire and operate alternative financial services companies focused on the UK’s non-standard customers.
The group, founded by former Provident Financial chairman John van Kuffeler, has already received a cornerstone investment of 48 million GBP from investors including Woodford Investment Management LLP, Invesco Asset Management Limited and Marathon Asset Management.
NSF intends to enable its acquired companies or businesses to realise their growth potential through scaling of IT, capital, compliance and finance platforms. The Company has been set up as a vehicle to acquire at least one (and preferably two or three) target companies or businesses in the UK non-standard consumer finance sector. Once the Company has made and combined these acquisitions so that it is a substantial operating entity, its intention is to expand through further acquisitions in the sector in the UK and possibly elsewhere.
Out of over 100 non-standard lending businesses in the UK, the Directors have identified around 20 companies that could be of interest to the Company. The Directors are currently interested in pursuing acquisitions in the following sub-sectors: guaranteed loans, consumer loans, rent to own and home collected credit, all of which are in non-standard unsecured consumer finance. Continue reading →
Most major services grew the originated loan volume in January. Prosper, like Lending Club before, no longer makes data available for the recent month. Funding Circle passed the milestone of 500M GBP lent since inception, while Auxmoney crossed 150M EUR. I added Investly and Mintos. I do monitor development of p2p lending figures for many markets. Since I already have most of the data on file I can publish statistics on the monthly loan originations for selected p2p lending services.
Table: P2P Lending Volumes in January 2015. Source: own research Note that volumes have been converted from local currency to Euro for the sake of comparison. Some figures are estimates/approximations.
Notice to p2p lending services not listed: If you want to be included in this chart in future, please email the following figures on the first working day of a month: total loan volume originated since inception, loan volume originated in previous month, number of loans originated in previous month, average nominal interest rate of loans originated in previous month.
The Royal Bank of Scotland has today announced that it is set to give thousands of small British businesses greater access to finance by formally referring customers to the p2p lending marketplaces Funding Circle and Assetz Capital.
From next week customers, who the bank is unable to financially help at the moment, will be signposted to both Funding Circle and Assetz Capital as options of alternative sources of finance. RBS accounts for 33% of the small business lending market, so is set to become the largest lender to refer small business customers. As well as this, after having explored Invoice Finance, Asset Finance, the Enterprise Finance Guarantee Scheme and the Regional Growth Fund, customers will be asked to visit the BBA’s dedicated website which also offers additional support.
The bank’s aim is to expand choice for customers whose loan applications do not meet the bank’s criteria, by signposting them to 2-5 peer-to-business lenders (P2B) alongside other alternative finance sources. This will happen through conversations that the customer will have with a relationship manager or through documents included with correspondence.
