At the end of last year, the Cambridge Centre for Alternative Finance (CCAF) published the fourth annual UK Alternative Finance Industry Report.
For several years now, the University of Cambridge and its partners have made it their mission to both record and evaluate the growth and development of the UK’s online alternative finance industry. This UK Alternative Finance Industry Report is a result of extensive research and analysis. The CCAF surveyed more than 8,300 users of online alternative finance, as well as 77 crowdfunding and P2P UK-based platforms, including rebuildingsociety.com.
As Bryan Zhang, Co-Founder and Executive Director at the CCAF, comments in the Executive Summary: “Online alternative finance has become an ever more established component of the UK financial landscape.” According to the report, the UK online alternative finance market grew by 43% in 2016, increasing from £3.2 billion to £4.6 billion.
In the report, peer-to-peer business, consumer and property lending are listed as the models with the highest market volume; of £1,232 million, £1,169 million and £1,147 million respectively. Invoice financing, debt-based securities and equity-based crowdfunding follow behind. As expected, London is the area with both the highest number of respondent platforms, and the region that receives the most funding. The north of England accounts for just under 12% of the platforms included in the research.
Approximately 72% of the 2016 UK alternative finance market volume – equating to £3.3 billion – was raised for the country’s start-ups and SMEs. This was a 50% increase on the year before, with 33,000 firms using alternative finance options, in comparison to the 20,000 in 2015.
An impressive 64% of the market volume is attributed to just five of the largest platforms. While 2016 saw few new entrants in the market, and the closure of over 35% of existing platforms, the trend of established traditional finance institutions incorporating alternative finance elements into their services continued.
In addition to compiling these facts and figures, the CCAF also recorded views and opinions about the FCA in the report. Over 80% of those questioned stated that they believe the FCA’s ongoing crowdfunding regulatory review process to be adequate and appropriate.
Entrenching Innovation – the 4th UK Alternative Finance Industry Report can be downloaded for free here.
