Europe still trails UK in alternative finance, but P2P is growing across the continent
THE UK is still leading the way in alternative finance, with lending volumes four times higher than the rest of Continental Europe, according to new research.
But a new report from KPMG and European P2P lender TWINO also showed that peer-to-peer lending is growing rapidly across Europe, with P2P consumer lending making up nearly three quarters (72 per cent) of Europe’s alternative online lending market in the first three quarters of 2016.
Between 2015 and the third quarter of 2016, European online alternative lending market volumes grown by 23 per cent, reaching €600m (£504m) in funded loans as at 30 September 2016, with the UK holding 81 per cent of this market share.
Read more: UK P2P lending hits £6.5bn
“This report shows that the UK still leads the way for alternative finance, although continental European lenders are quickly catching up,” said Jevgenijs Kazanins, chief executive of TWINO. “We believe that alternative finance will continue to grow quickly in Continental Europe, potentially to the detriment of the UK as the effect of the Brexit vote begins to weigh on the British economy.”
The report identified the top players in Europe’s P2P consumer lending market as Younited Credit (France) and Auxmoney (Germany), followed by TWINO and Mintos, which are both based in Latvia.
Read more: Global P2P market worth over £106bn
“Currently, we’re seeing how new technologies are making it possible for smaller countries to successfully compete with well-established players in the market; the alternative finance sector is a key example of this,” said Jūlija Masāne-Ose, KPMG Baltics’ deal advisory director. “It’s clear that a nation’s size and geographic location is of far less importance than a successful strategy to attract investors and issue loans.
“Given the present state of Continental Europe’s market, which is still rather untapped, local mutual borrowing platforms continue to dominate, filling the niches in both high risk and medium risk unsecured loans.
“However, there is an observable new trend now appearing with European mutual borrowing platforms, with many showing a growing interest for expansion in markets outside Europe.”