Cambridge unveils second Americas alternative finance report

University publishes latest alternative finance sector study, covering the US, Canada, Latin America and the Caribbean.

Leading university publishes latest alternative finance sector study, covering the US, Canada, Latin America and the Caribbean.

The University of Cambridge’s Centre for Alternative Finance has published its latest research report on the state of alternative finance in the Americas, approximately one year on from the first iteration. The research has been compiled in collaboration with Chicago Booth’s Polsky Centre for Entrepreneurship and Innovation, CME Group and The Inter-American Development Bank.

The report covers all forms of alternative finance, from marketplace lending to rewards-based crowdfunding.

Key findings include an industry-wide “market volume” figure for 2016 of $34.5bn, up 22 per cent from the previous year. The growth comes despite the tribulations of the consumer-focused marketplace lending sector in the US, which continues to account for the majority ($21bn) of the overall market’s yearly output.

US online lenders were forced to endure both scandal and waning investor demand in 2016, but now appear to be emerging from their malaise, helped by news such as Prosper’s recent $5bn funding deal.

According to the report, balance sheet business lending became the second largest industry sub-sector by annual output in 2016 with $6bn originated, versus $3bn by balance sheet-based consumer lenders.

Other interesting tidbits from the 77 page report include:

• Alternative business lenders in Latin America and the Caribbean (LAC) bested their Canadian counterparts in terms of yearly output, $233.8m to $169.7m.
• Chile is an emerging industry hub, accounting for 71 per cent of LAC online alternative business volume.
• Regulation continues to divide opinion among Americas-based equity crowdfunders. 36 per cent see current regulations as excessive and too strict, while 36 per cent regard them as adequate and appropriate.
• Cyber-security is seen as a major risk across the Americas, perhaps unsurprisingly, in light of recent events. 76 per cent of platform operators believe there is a medium to very high risk of cyber-security breach.

The full report may be accessed by clicking here.