The Global Alternative Finance Market Benchmarking Report

228 Pages Posted: 18 Feb 2021

See all articles by Tania Ziegler

Tania Ziegler

University of Cambridge - Cambridge Centre for Alternative Finance

Rotem Shneor

University of Agder

Karsten Wenzlaff

University of Hamburg - Faculty of Business, Economics, and Social Sciences; University of Cambridge - Cambridge Centre for Alternative Finance; European Centre for Alternative Finance

Britney Wang

affiliation not provided to SSRN

Jaesik Kim

affiliation not provided to SSRN

Felipe Ferri de Camargo Paes

University of Cambridge - Cambridge Centre for Alternative Finance

Krishnamurthy Suresh

University of Cambridge, Judge Business School, Cambridge Centre for Alternative Finance, Students

Bryan Zheng Zhang

Cambridge Centre for Alternative Finance, Cambridge Judge Business School, University of Cambridge

Leyla Mammadova

University of Cambridge, Judge Business School, Cambridge Centre for Alternative Finance, Students

Nicola Adams

affiliation not provided to SSRN

Date Written: January 22, 2021

Abstract

For the first time, the Cambridge Centre for Alternative Finance has consolidated its annual regional reports to produce one global benchmarking report, with the intention of presenting world-wide online alternative finance data for 2018.This report presents the key findings from the CCAF annual global survey of online alternative finance. In all, 1,227 unique firms contributed to this study, providing 2,322 firm-level observations globally. Investigating in crowdfunding, P2P/marketplace lending or related capital raising activities, the study shows that 47 per cent of the firms were operating in two or more countries or jurisdictions.

Highlights from the report

In 2018, the global alternative finance industry facilitated USD $304.5 billion in transaction volume. This global alternative finance volume is representative of funds that were raised via an online alternative finance platform for consumers, business and other fundraisers. This volume represents a 27 per cent annual decline against the $419 billion recorded in 2017. However, this drop in global volume stems primarily from a sharp decline in alternative finance activities in China. Excluding the Chinese market, the global alternative finance market volume actually grew by 48 per cent year-on-year, from the $60 billion in 2017 to $89 billion In 2018.

China had the largest alternative finance volume by country, having generated a total of $215.37 billion in 2018. The United States ($61 billion) and the United Kingdom ($10.4 billion) came in second and third respectively. In 2018, five additional countries surpassed the $1 billion threshold of alternative finance market volume including the Netherlands ($1.8 billion), Indonesia ($1.45 billion), Germany ($1.27 billion), Australia ($1.16 billion) and Japan ($1.07 billion).

In 2018, online alternative business funding for start-ups and SMEs accounted for $82 billion, which fell by almost half from the high of $153 billion recorded in 2017. Much like the global total market volume, this significant reduction in alternative business funding was largely due to the sharp decline in business focused funding activity in China. Excluding China, global business funding through alternative channels increased from the $21 billion in 2017 to $31 billion in 2018. This represented a 47 per cent annual increase against the previous year.

Approximately $162 billion of alternative finance volumes directly stem from funding provided by institutional investors such as banks, pension funds, mutual funds and family offices. With the involvement of institutional investors on the rise, most regions were fairly equally split, with roughly 50 per cent of funding coming from the institutions and rest provided by retail investors.

Keywords: fintech, alternative finance, financial instruments, financial channels, crowdfunding, P2P lending, marketplace lending, capital raising, funding, digital lending, digital payments,

Suggested Citation

Ziegler, Tania and Shneor, Rotem and Wenzlaff, Karsten and Wang, Britney and Kim, Jaesik and Paes, Felipe Ferri de Camargo and Suresh, Krishnamurthy and Zhang, Bryan Zheng and Mammadova, Leyla and Adams, Nicola, The Global Alternative Finance Market Benchmarking Report (January 22, 2021). Available at SSRN: https://ssrn.com/abstract=3771509 or http://dx.doi.org/10.2139/ssrn.3771509

Tania Ziegler (Contact Author)

University of Cambridge - Cambridge Centre for Alternative Finance ( email )

10 Trumpington Street
Cambridge, CB21QA
United Kingdom

Rotem Shneor

University of Agder ( email )

Serviceboks 422
N-4604 Kristiansand, VEST AGDER 4604
Norway

Karsten Wenzlaff

University of Hamburg - Faculty of Business, Economics, and Social Sciences ( email )

Von-Melle-Park 9
Hamburg, 20146
Germany

University of Cambridge - Cambridge Centre for Alternative Finance ( email )

10 Trumpington Street
Cambridge, CB21QA
United Kingdom

European Centre for Alternative Finance ( email )

Vredenburg 138
Utrecht, 3511 BG
Netherlands

Britney Wang

affiliation not provided to SSRN

Jaesik Kim

affiliation not provided to SSRN

Felipe Ferri de Camargo Paes

University of Cambridge - Cambridge Centre for Alternative Finance

10 Trumpington Street
Cambridge, CB21QA
United Kingdom

Krishnamurthy Suresh

University of Cambridge, Judge Business School, Cambridge Centre for Alternative Finance, Students

Cambridge
United States

Bryan Zheng Zhang

Cambridge Centre for Alternative Finance, Cambridge Judge Business School, University of Cambridge ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom

HOME PAGE: http://www.jbs.cam.ac.uk/ccaf

Leyla Mammadova

University of Cambridge, Judge Business School, Cambridge Centre for Alternative Finance, Students ( email )

Cambridge
United States

Nicola Adams

affiliation not provided to SSRN

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