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Page 1: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

Cambridge Centre for Alternative Finance

THE LANDSCAPE OF PEER TO PEER / MARKETPLACE LENDING

CAMBRIDGE CENTRE FOR ALTERNATIVE FINANCEUNIVERSITY OF CAMBRIDGE JUDGE BUSINESS SCHOOL

Page 2: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

• 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

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Page 3: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

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

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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

Page 4: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

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

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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

$USD

Billi

ons

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Global Alternative Finance Market Volume (2013-2017)

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Page 6: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

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

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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

Page 7: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

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

Page 8: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

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

Page 9: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

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

Page 10: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

European Alternative Finance Market Volumes by Sub Regions in 2017

Page 11: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

€ 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)

Page 12: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

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

Page 13: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

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

Page 14: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

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

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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 SMEsPeer-to-Peer Business LendingGross 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

Page 16: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

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

Page 17: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

Institutionalisation of Funding in Europe (2015-2017)

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Page 18: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

Gender Dynamics in European Online Alternative Finance (excluding UK)

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Page 19: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

The Perception of Regulations by Model in Europe (2017)

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Page 20: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

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

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Page 21: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

Research Programme: World Bank and CCAF

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CCAF-World Bank GlobalAlternativeFinance 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

Page 22: Cambridge Centre for Alternative Finance THE …pubdocs.worldbank.org/en/382571560127611420/FinSAC...Cambridge Centre for Alternative Finance THE LANDSCAPE OF PEER TO PEER / MARKETPLACE

http://www.jbs.cam.ac.uk/ccaf

@CambridgeAltFin

[email protected]