Canada’s alternative finance market boomed in 2017

The University of Cambridge’s latest alternative finance reports says the Canadian market grew 159 per cent in 2017.

Americas’ alternative finance market grew 26 per cent in 2017, significantly pushed by Canada’s growth rate of 159 per cent, according to the University of Cambridge Judge Business School’s latest Alternative Finance report.

Throughout North, Central and South America, the US accounted for 97 per cent for the regions’ alternative finance market growth in 2017, according the report.

The report is based on data collected from 376 alternative finance platforms across 35 countries and territories through the three regions.

Across all regions, the online alternative finance market grew to $44.3bn in 2017, a 26 per cent increase from $35.2bn in 2016. The US accounted for 97 per cent of the market ($42.8bn) with Canada ($868m), Latin America and the Caribbean ($663m) accounting for the remaining 3 per cent.

Balance sheet consumer lending and peer-to-peer consumer lending were the leading drivers for the US’ dominating market share. Outside of the States, the market’s growth was driven by business focus alternative finance, channelled to support small and medium sized companies.

Whilst the US dominates the market, Canada’s alternative finance market saw significant growth, growing 159 per cent from $335m in 2016, to $868m in 2017. A key driver for this development was alternative business funding which accounted for 61 per cent of the growth. This is significantly higher than the UK’s 35 per cent growth stated in the university’s UK market report.

The Latin America and the Caribbean grew 78 per cent over the same period, as Brazil became the region’s market leaders, overtaking Mexico and Chile.

Latin America and the Caribbean still have a varied perception of the industry’s regulation, according to the report. Each country within the region has different fintech regulations in place and therefore makes it difficult to get a region’s perspective.

Many regulators across Latin America and the Caribbean use the University’s series of studies to support and design policies, says Diego Herrera, Financial Markets Lead Specialist, Inter-American Development Bank.

Herrera also said: “Regulation has become one of the most important drivers for the success of fintech ecosystems in the region through the mitigation of legal uncertainty and the creation of secure conditions for entrants. As the regional ecosystem evolves, so too does the fintech policymaking and regulatory proposals.”