By Guglielmo de Stefano on 18th March 2016
The study highlights that China is the world’s largest alternative finance market by transaction volume, registering $101.7bn in 2015.
Cambridge has recently released a research on the status of the Alternative Finance Market in Asia-Pacific, in conjunction with KPMG and Sydney University. The research – entitled “Harnessing Potential” – is a benchmarking report for the Chinese, Indian, Southeast Asian and Australasian markets and examines its recent trends, competitive dynamics and a great deal more.
Alternative finance is developing rapidly in the Asia-Pacific region. The report captures an estimated 70% of the visible market and estimates a transaction volume of $102.81bn in 2015 (323% year-on-year growth).
China is the world’s largest alternative finance market by transaction volume. Between 2013 and 2014, Chinese transaction volumes increased from $5.56bn to $24.3bn (a year-on-year growth rate of 337%) and from $24.3bn to $101.69bn (a year-on-year growth rate of 319%) between 2014 and 2015. The Chinese market constitutes almost 99% of total transactional volumes in the Asia-Pacific region and it’s almost 23 times larger than the UK sector – which registered a transaction volume of $4.5bn (£2.8bn) in 2015, as reported by AltFi Data.
Excluding China, the rest of the Asia-Pacific region recorded a volume of $1.12bn in 2015 – with a 313% year-on-year growth rate – up from $271.94m raised in 2014. Between 2013 and 2014, this market increased from $137m to $272m (an average year-on-year growth rate of 98%).
Japan’s online alternative finance market accrued a transaction volume of $360.23m in 2015, followed by Australia (with $348.37m), New Zealand ($267.77m), South Korea ($41.18m), India ($39.91m) and Singapore ($39.76m).
The report hones in on the dynamics and the diversity of the Asia-Pacific Alternative Finance market as well as on market fundamentals. You may read the full report here. The research outlines four possible reasons for the booming of Asia’s alternative finance market, as shown below.
The benchmarking report concludes by highlighting that the opportunities for the world's most populous region to harness the potential of alternative finance are abundant. On the other hand, the main challenges are how to best nurture the continued growth of the Asian AltFi industry, how to grow the market in a sustainable manner and how best to develop an appropriate and proportionate regulatory regime.
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.