The UK may be dubbed Europe’s largest fintech market, but other countries on the continent appear to be making better use of alternative lenders when it comes to coronavirus financial support.
The UK government’s coronavirus business interruption loans scheme has been criticised for its slow delivery by banks, while alternative lenders such as peer-to-peer platform Funding Circle have only just been approved and haven’t started delivering loans yet.
Other P2P lenders such as Assetz Capital, JustUs and Folk2Folk are still awaiting the outcome of their applications, amid calls for fintechs to be used more to get money out faster to struggling firms.
This is in stark contrast to just across the Channel where the French government announced last week that P2P and other fintech lenders could help deliver emergency loans – known as EMPS – alongside banks with a state guarantee of €300bn (£262bn).
“The minister of the economy Bruno Le Maire has recognised the essential and innovative role of crowdlending platforms in financing the economy by enabling them to distribute EMPs, particularly in this period of unprecedented crisis,” Alain Clot, president of France Fintech.
“This extension of the EMPs to the platforms is crucial to support small- and medium-sized enterprises (SMEs) that are suffering. Fintech is resolutely engaged in this battle alongside the banks.”
Germany and Switzerland have also been praised for getting state aid out to struggling businesses quickly by providing 100 per cent guarantees, something the UK government has been reluctant to do until the Treasury launched its Bounce Back Loans scheme this week.
There even seem to be better opportunities for UK fintechs abroad.
In Italy, non-bank lender Ebury, which is based in the UK, has become the first non-bank financial institution to be granted approval to provide SMEs with loans under the Italian government’s guarantee scheme “Garanzia Italia”.
“We are delighted to be assisting the Italian SME community and government by helping to maximise the impact of this scheme during this crisis,” Juan Lobato co-founder of Ebury, said.
“We are now assisting governments in Spain, The Netherlands and Italy in the race to provide the necessary funds to thousands of businesses stricken by the fight against the coronavirus.”
The UK may be where the biggest fintech deals are made, but there is a risk that the sector misses out on showing how supportive it can be compared with European counterparts due to UK government delays.