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The World's First Americas Benchmarking Report




By Ryan Weeks on 12th April 2016


The first academic report to hone in on the alternative finance market in the Americas has arrived.

 

The “Breaking New Ground: The Americas Alternative Finance Benchmarking Report” surveys a market which produced $36.49 billion in financing volume in 2015 – a 212% annual increase on the previous year’s total of $11.68 billion. The focus of the report was on marketplace/P2P lending and crowdfunding activities, capturing an estimated 80% of the visible online alternative finance market (by transaction volumes) in the Americas. The comprehensive study was conducted over the course of 8 months, and surveyed 257 online alternative finance platforms. 178 of these platforms hailed from the US and Canada.

 

The team behind the report included the Cambridge Centre for Alternative Finance, the University of Cambridge Judge Business School and the Polsky Center for Entrepreneurship and Innovation at the University of Chicago Booth School of Business (Chicago Booth). KPMG served as a partner and the CME Group Foundation, the Inter-American Development Bank (IDB), the Business Development Bank of Canada (BDC) and CPAmerica also provided support. Cambridge has been the driving force behind a trio of benchmarking reports in the early stages of 2016, the first focused on the UK and the second on the Asia-Pacific region.

 

The key findings of the report include the following:

 

  • The report provides some context as to the scale of the US market, which has to date contributed 99% of the c. $50bn in cumulative funding that has been delivered by alternative finance providers in the Americas. The US is the world’s second largest online alternative finance market, second only to Mainland China.
  • Chile, surprisingly, accounted for nearly half of $110.46m delivered by the Latin American and Caribbean markets in 2015.
  • Marketplace/P2P consumer lending stood out as the largest single market segment in the Americas, with $25.74bn in credit delivered in 2015.
  • The continued growth of real estate funding models was not glazed over. The marketplace/P2P real estate sector grew at a rate of 471% between 2013 and 2015.
  • Institutional involvement in the marketplace/P2P space was shown to be crucial, as is to be expected. Between 2013 and 2015, over 72% of marketplace/P2P business loans, 53% of marketplace/P2P consumer loans, 83% of invoice trades and 74% of marketplace/P2P real estate loans were funded by institutional investors.
  • Women are becoming an increasingly important part of the alternative finance market as a whole, especially within donation and rewards-based crowdfunding, where approximately 60% of users are female.
  • Opinions continue to be split over regulation, with 51% of US lending platforms and 43% of equity platforms deeming existing regulations to be “adequate and appropriate”. 15% of lending outfits and 34% of equity platforms consider existing regulations to be too strict or excessive.

 

Robert Wardrop, Executive Director of the Cambridge Centre for Alternative Finance, offered his thoughts:

 

“In contrast with other markets that we have analyzed, the Americas region stands out for its complexity. This reflects the sophisticated financial markets and correspondingly complex regulatory environment in the region, but also illustrates the proficiency of the entrepreneurship ecosystem for deployment of technological innovation at scale. Our title for this year’s report, Breaking New Ground, attests to outcomes produced by this innovation.”

 

The Cambridge-led benchmarking series provides a useful means of taking the pulse of alternative finance markets globally. You can access the complete “Breaking New Ground” survey below. 

 

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