THE GLOBAL peer-to-peer lending market grew by a whopping 271 per cent to more than $130bn (£106.4bn) last year, according to new research.
The market was valued at $35bn in 2014, according to the joint study by accountancy firm KPMG and the Cambridge Centre for Alternative Finance.
The whole alternative finance market – including equity-based crowdfunding – was worth more than $145bn worldwide in 2015, the report said.
Institutional funding into alternative finance models increased significantly last year to $30.7bn, with the US and the UK leading the way, followed by France.
“2015 was the year when alternative finance really came into its own,” said Warren Mead, global co-lead for fintech at KPMG. “The dominating influence was the growth in China, which accounts for 70 per cent of global volume, followed by the US. Both of these countries demonstrate the opportunity for Europe and the rest of the world.”
The Chinese alternative finance market was valued at $101.69bn last year and the US market at $36.17bn. The UK market was valued at $4.9bn – dwarfing that of Japan ($0.36bn) and France ($0.35bn).
Mead said that “a patchwork of inconsistent regulation” was dividing the industry.
“As we look forward to 2017, to ensure continued growth and investor confidence, the industry needs a transparent and supportive regulatory framework in large parts of the world and to manage the inevitable platform failures in an orderly fashion,” he said.
Unsurprisingly, manufacturing and engineering were the most common sectors to use online alternative finance sources. In second place was business and professional services, followed by real estate and housing, mostly due to the swift growth of real estate alternative finance models.