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  • Cambridge Centre for Alternative Finance

    THE LANDSCAPE OF PEER TO PEER / MARKETPLACE LENDING

    CAMBRIDGE CENTRE FOR ALTERNATIVE FINANCE UNIVERSITY OF CAMBRIDGE JUDGE BUSINESS SCHOOL

  • • Established in 2015 at the University of Cambridge Judge Business School

    • 30 Research Publications to Date

    • 3500+ FinTech Platforms Surveyed on a Yearly Basis Spanning 185 countries

    • 300+ Industry and Academic Research Partners

    • 40,000 Users of Alternative Finance Surveyed with £10bn Granular-Level Transaction Data Analyzed

    • 300+ Policy and Regulatory Citations to Date

    CAMBRIDGE CENTRE FOR ALTERNATIVE FINANCE (CCAF) RESEARCH HIGHLIGHTS

    2

  • A Taxonomy of Online Alternative Finance (Digital Credit and Capital Raising)

    3

    Alternative Finance Model Abbreviations Definition

    Peer-to-Peer/Marketplace Consumer Lending P2PC

    Individuals or institutional funders provide a loan to a consumer borrower

    Peer-to-Peer/Marketplace Business Lending P2PB

    Individuals or institutional funders provide a loan to a business borrower

    Peer-to-Peer/Marketplace Property Lending P2PP

    Individuals or institutional funders provide a loan to a property borrower

    Reward-based Crowdfunding Reward CF Backers provide finance to individuals, projects or companies in exchange for non-monetary rewards or products

    Real Estate Crowdfunding Real Estate CF Individuals or institutional funders provide equity or subordinated-debt financing for real estate

    Equity-based Crowdfunding Equity CF Individuals or institutional funders purchase equity issued by a company

    Donation-based Crowdfunding Donation CF Donors provide funding to individuals, projects or companies without expectations of monetary or material return

    Invoice Trading - Individuals or institutional funders purchase invoices or receivable notes from a business at a discount

    Debt-based Securities - Individuals or institutional funders purchase debt-based securities, typically a bond or debenture at a fixed interest rate

    Balance Sheet Business Lending BSB The platform entity provides a loan directly to a business borrower

    Profit Sharing Crowdfunding - Individuals or institutions purchase securities from a company, such as shares or bonds, and share in the profits or royalties of the business

  • Global Online Alternative Finance Total Market Volume 2013-2017 ($Billions)

    4

    11.06 38.56

    138.97

    290.28

    $ 418.52 B

    -

    50.00

    100.00

    150.00

    200.00

    250.00

    300.00

    350.00

    400.00

    450.00

    2013 2014 2015 2016 2017

    $U SD

    B illi

    on s

  • Global Alternative Finance Market Volume (2013-2017)

    5

  • 2017 Global Total Volume by Model (Debt models = 87% of the total volume)

    6

    0.47

    0.76

    1.38

    2.81

    7.68

    9.14

    102.70

    243.73

    0.00 50.00 100.00 150.00 200.00 250.00

    Donation CF

    Reward CF

    Equity CF

    RealEst CF

    Inovice Trading

    P2PP

    P2PB

    P2PC

    Billions

  • European Online Alternative Finance Market Volumes 2013-2017 €Bn (Ex. UK)

  • European Alternative Finance Market Volumes by Country & Per Capita (2017)

  • Alternative Finance Market Volume per Capita vs GDP per Capita (€EUR) 2017

  • European Alternative Finance Market Volumes by Sub Regions in 2017

  • € 1392m

    € 467m

    € 536m

    € 211m

    € 159m

    € 259m

    € 67m

    € 95m

    € 53m

    € 75m

    € 3m

    € 29m

    € 2m

    € 697m

    € 350m

    € 252m

    € 219m

    € 191m

    € 109m

    € 95m

    € 59m

    € 32m

    € 23m

    € 17m

    € 10m

    € 8m

    € 366m

    € 212m

    € 81m

    € 159m

    € 139m

    € 27m

    € 2m

    € 22m

    € 11m

    € 1m

    € 0m € 200m € 400m € 600m € 800m € 1000m € 1200m € 1400m € 1600m

    P2P Consumer Lending

    P2P Business Lending

    Invoice Trading

    Equity-based Crowdfunding

    Reward-based Crowdfunding

    Real Estate Crowdfunding

    P2P Property Lending

    Balance Sheet Business Lending

    Donation-based Crowdfunding

    Debt-based Securities

    Balance Sheet Consumer Lending

    MiniBond

    Profit Sharing Crowdfunding

    2017 2016 2015

    Alternative Finance Volume in Europe by Model 2013-2017 (€ EUR)

  • Total Online Alternative Business Funding (Excl. UK) 2012-2017 (€millions)

  • Debt vs Equity Online Alternative Business Finance 2012-2017 (€millions)

  • 1,084

    2,858

    5,801

    9,442

    14,521

    24,107

    -

    5,000

    10,000

    15,000

    20,000

    25,000

    30,000

    2012 2013 2014 2015 2016 2017

    Business Fundraisers

    164%

    103%

    63%

    54%

    66%

    Number of European Businesses Raising Alternative Finance (ex UK) 2012-17

  • 0.3% 0.9%

    3.3% 4.4%

    6.6%

    9.5%

    £ 62 m £ 193 m £ 749 m £ 881 m £ 1.2 bn £ 2.04 bn

    £ 38 bn

    £ 43 bn

    £ 53 bn

    £ 58 bn £ 59 bn £ 57 bn

    £ 18.2 bn £ 20.5 bn

    £ 22.7 bn £ 19.9 bn £ 18.3 bn

    £ 21.4 bn

    0%

    5%

    10%

    15%

    20%

    25%

    30%

    £ 0 bn

    £ 10 bn

    £ 20 bn

    £ 30 bn

    £ 40 bn

    £ 50 bn

    £ 60 bn

    £ 70 bn

    2012 2013 2014 2015 2016 2017

    Peer-to-Peer Business Lending as a percentage of BBA New Loans to SMEs Peer-to-Peer Business Lending Gross Lending to SMEs (Bank of England) New Loans to SMEs (BBA Data)

    P2P Business Lending in the Context of Bank Lending to SMEs, 2012-17

  • 0.9%

    3.1%

    11.7% 13.1%

    17.4%

    29.2%

    0%

    5%

    10%

    15%

    20%

    25%

    30%

    2012 2013 2014 2015 2016 2017

    Peer-to-Peer Business Lending as a Percentage of New Loans to Small Businesses in the UK, British Bankers Association (BBA) Data 2012-2017

  • Institutionalisation of Funding in Europe (2015-2017)

    17

  • Gender Dynamics in European Online Alternative Finance (excluding UK)

    18

  • The Perception of Regulations by Model in Europe (2017)

    19

  • Perceived Risks by Platforms in P2P/Marketplace Lending (2017)

    20

  • Research Programme: World Bank and CCAF

    7

    CCAF-World Bank GlobalAlternative Finance Market Volume Rankings  Launching in June 2019  185 Countries  2012-2017 Data  Globally and Regionally Comparable

    World Bank – CCAF GlobalAlternative Finance Regulation Survey  Launching in June 2019  100 jurisdictions (regulators/central

    banks)  General Regulatory Approaches  Regulations on Crowdfunding, P2P

    Lending and ICOs  Regulatory Innovations

    World Bank – CCAF FinTech Innovation in the Western Balkans & Eastern Partnership

    World Bank – CCAF Alternative Financing Models for Off-grid Solar Energy

  • http://www.jbs.cam.ac.uk/ccaf

    @CambridgeAltFin

    [email protected]

    Slide Number 1 CAMBRIDGE CENTRE FOR ALTERNATIVE FINANCE (CCAF) �RESEARCH HIGHLIGHTS A Taxonomy of Online Alternative Finance (Digital Credit and Capital Raising) Global Online Alternative Finance Total Market Volume 2013-2017 ($Billions) Global Alternative Finance Market Volume (2013-2017) 2017 Global Total Volume by Model (Debt models = 87% of the total volume) European Online Alternative Finance Market Volumes 2013-2017 €Bn (Ex. UK) European Alternative Finance Market Volumes by Country & Per Capita (2017) Alternative Finance Market Volume per Capita vs GDP per Capita (€EUR) 2017 European Alternative Finance Market Volumes by Sub Regions in 2017 Slide Number 11 Total Online Alternative Business Funding (Excl. UK) 2012-2017 (€millions) Debt vs Equity Online Alternative Business Finance 2012-2017 (€millions)� Slide Number 14 Slide Number 15 Slide Number 16 Institutionalisation of Funding in Europe (2015-2017) Gender Dynamics in European Online Alternative Finance (excluding UK) The Perception of Regulations by Model in Europe (2017) Perceived Risks by Platforms in P2P/Marketplace Lending (2017) Research Programme: World Bank and CCAF Slide Number 22