A recent report has shown that the UK’s alternative finance sector has grown by an impressive 84% to £3.2 billion in 2015.
Performed by the University of Cambridge Centre for Alternative Finance and Nesta, the report is the result of tracking various forms of alternative finance throughout the year, including peer to peer business lending, peer to peer consumer lending, and other forms of FinTech. This is the third year in a row that the report has been compiled – this year’s edition saw 94 platforms participate, including Lending Works, Funding Circle, and Zopa.
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The report was abundant with positive results for the alternative finance sector, the main result being the 84% growth for online alternative finance (from £1.74 billion in 2014). The biggest beneficiaries were small and medium enterprises; approximately 20,000 SMEs used digital platforms to raise about £2.2 billion throughout 2015. Overall donation-based crowdfunding is one of the fastest growers in the sector, having shown an impressive 500% growth in 2015. It has also been shown that institutional investors are playing a larger role in the alternative finance sector, with big money driving 26% of business and 32% of consumer lending.
The results of the report should be massively encouraging to those in doubt about the alternative finance sector. However, some highly doubt the reliability of the dynamic FinTech industry, as there have been several major failures in the world of crowdfunded companies, as the report highlights. Time will only tell if the reports of the coming years are just as positive and promising as 2015’s.