European Alternative Finance Enjoys 92% Growth Year-over-year

EUR 500 bills - European Alternative Finance Enjoys 92% Growth Year-over-yearNew research from the Cambridge Centre for Alternative Finance (CCAF) has found that European alternative finance jumped 92% year-over-year to €5.4 billion in 2015.

The report, entitled “Sustaining Momentum”, captures at least 90% of the visible market, and has had support from 367 various platforms and 17 European industry associations across the continent,  and is therefore considered to deliver the most definitive study to date.

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The research confirms once again that the UK continues to dominate European alternative finance, aggregating €4.4 billion in funding.

In second place is France at €319 million, and Germany in third at €249 million. It should be noted, however, that the overall rate of growth did slow during the period, but a “sustained momentum” is nonetheless recognised as being achieved as platforms mature.  

Robert Wardrop, Executive Director of the CCAF, commented on the report:

“European alternative finance transaction volume increased to more than €5 billion in 2015, with volume outside of the UK market exceeding €1 billion for the first time. The European alternative finance industry is still small, however, and the slowing rate of growth during the year is a reminder of the risks the industry must contend with in order to transition from a start-up to a sustainable funding channel within the European financial services ecosystem.”

P2P finance is shown to be still the largest sector of alternative finance, with help from institutional funding now flowing in at a rate of 24% for P2B lending and 26% for P2P consumer lending.  

Irene Pitter, Global Executive, Banking & Capital Markets and member of the FinTech Leadership Team at KPMG, said the report shows that alternative finance continues to grow and mature – even outside of the UK. Quoted in Crowdfund Insider, she said:

“2016 marks a significant year for ‘alternative finance’ in Europe as the market demonstrates clear signs of continued strong growth and increased maturation in the sector as a whole. European activity, excluding the UK, showed solid growth of 72 percent last year and demonstrated client demand for alternative finance solutions even in the smaller EU countries.”

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