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Defining a constantly evolving and rapidly expanding sector such as Alternative Finance is always not an easy challenge. There are almost daily innovations as Platforms seek to carve out new niches and come up with new ways of financing. Alternative Finance means different things to different people.

The Liberum AltFi Volume Index, The Index, is designed to capture peer to peer financing. This can be divided up into 3 separate sectors: Peer to Peer Lending; Equity Crowdfunding and Online Invoice Financing.

All of these forms of financing have one thing in common:

The Platform is therefore the facilitator or intermediary. Other characteristics that are often, but not always, present in these Platforms include:

Peer to Peer Lending

Online Invoice Financing

Equity Crowdfunding


P2PFA definitions of Non-Performing Loans and Defaults

Definition of Non-Performing Loan

A loan should be considered to be a ’Non-Performing Loan', 'Impaired' or in ‘Arrears’, where the relevant borrower of the loan is:

(a) more than 45 days overdue in an interest payment; or

(b) more than 45 days overdue with a principal repayment; or

(c) legal action for enforcement of the loan has commenced; or

(d) the loan is being or has been renegotiated with a borrower, or 

(e) the loan has not otherwise been in full compliance.

The amount of arrears is the amount overdue for payment in a) and b) above.

Definition of Capital Losses (Default)

A capital loss should include:

(a) any portion of a loan that has not been repaid, 120 days following the original loan repayment date;

(b) all costs incurred by the lender in relation to the enforcement of a Non-Performing Loan, where such costs are not recovered in full from the relevant borrower;

(c) any loan amount where there is a reasonable expectation that the borrower is not going to repay the loan on the original loan repayment date (ie the borrower has gone bankrupt etc).

To be reported on a 12 monthly calendar basis (Jan to Dec)