CCR Magazine

CCRi banner ad
You are here  :Home arrow News arrow UK alternative finance market for businesses projected to 'Reach £10 Billion by 2020'
Contact Us Newsletter Signup RSS Feeds

Latest News Headlines

Headlines

 
Commercial Credit News

  • Asset finance up 16% in June
    New figures released today by the Finance & Leasing Association (FLA) show that asset finance new business (primarily leasing and hire purchase)… More

Headlines

 
UK alternative finance market for businesses projected to 'Reach £10 Billion by 2020' PDF Print E-mail
Monday, 28 September 2015

Fiserv, Inc., a leading global provider of financial services technology solutions, announced today that U.K. small and medium sized enterprises (SMEs) are  likely to benefit from the substantial projected growth of alternate sources of funding such as peer-to-business (P2B) lending and crowd-funding over the next five years. This is according to Future Trends in U.K. Banking, a report commissioned by Fiserv and compiled by the Centre for Economics and Business Research (Cebr).The report looks at changing trends in the U.K. banking sector and the growing importance of alternative finance, particularly for the U.K.’s SMEs.

Despite generating 43 percent of all private sector turnover in the U.K., the credit environment for SMEs has remained challenging since the global economic crisis. With the introduction of new legislation in the last three years, SMEs are becoming aware of alternative financing options, which have started to grow in the U.K.
 
The rise of alternative finance options

The financial crisis prompted numerous government-led initiatives to boost lending conditions for businesses in the U.K., but these have not gathered pace. At the same time, the popular P2B business lending sector has been gathering momentum. The report estimates P2B lending to be worth £850 million in new flows of credit in 2014 (and £1.2 billion in total), a significant increase from just £20m in 2011. The crowd funding market, where businesses can raise money from an online community or group of people, is even newer than P2B lending, yet was estimated to be worth £310 million in 2013.
 
These sources of alternative finance could be worth £12.3 billion a year by 2020, which would represent a £14,000 loan for every small business applying for credit. However, in spite of this growth and some level of dissatisfaction with mainstream lenders, many SMEs claim a lack of knowledge about alternative finance with 58 percent reporting they wouldn’t know where to find these sources. This finding is expected to change as alternative finance providers flood the market to capitalize on growth. 
 
Travers Clarke-Walker, Chief Marketing Officer, International Group, Fiserv said: “Our research suggests that improved and user-friendly technology is impelling the growth of alternative finance in the U.K. We have seen the P2B and crowd-funding sectors engaging in a concerted marketing push, which is likely to raise awareness significantly. The buzz around alternative finance for SMEs is giving alternative financiers legitimacy and encouraging SMEs to try these alternative funding options.”
 
The future looks bright for SMEs with estimates putting total potential P2B lending as high as £12.3 billion a year – a figure that given current growth rates in the market could easily be reached by 2020. If only half of UK households lent just a tenth of their savings through P2B, this could potentially give a total pool of available lending of £11 billion.
 
The report finds the scale of credit gained by SMEs in the alternative finance sector is likely to climb sharply over the years to 2020 and beyond. This is not necessarily at the expense of more traditional banks however, as the economy is projected to expand relatively robustly over the medium term, increasing demand for credit overall.
 
Clarke-Walker added: “As SMEs and consumers demand new products and services, there is a significant opportunity for banks to innovate with their own new products or to coexist through partnership with start-ups and alternative lenders. By embracing technological advances, financial institutions can also contribute to serving SMEs with this growth in new forms of lending and expanded credit.”

(Source - Fiserv Press Release)
 

 
CCRI
3 October - Guoman Tower Hotel, Central London 

CCRInteractive, in association with Marston Holdings , is the largest and leading one-day conference from the publishers of CCRMagazine – a truly national and international event for the credit industry.

This landmark event allows delegates to: Learn best practice of how to increase profitable sales in today’s economy. Understand the key compliance issues and how they will impact upon you. Discuss the legislative and regulatory framework and how it will effect you. Consider the potential effects of Brexit on your business. Discover the latest innovations in the market to improve your collections. Motivate your staff to achieve ever improved results.

To book to attend in 2017, contact Stephen Kiely  or Alison Lucas. To find out more about being part of this landmark event, please contact Gary Lucas
CCRI 

 Forums International Ltd

Forums International Ltd

 Attendance at your first meeting is free of charge, and please quote reference 'CCR2016' to receive the special 10% discount off of your first annual subscription.

Find out more here.

latest issue

CCR Cover

The latest edition of CCR Magazine, the leading editorial publication in the UK credit industry, is out.

Read the latest issue online

The Credit Excellence Awards

Awards 

Tuesday 3 October - Guoman Tower Hotel, Central London


Do not miss your chance to meet and network with the Winners and Finalists at the Credit Excellence Awards, in association with Hoist Finance.


To book your place to attend, please contact Alison Lucas.


subscriptions

CCR is the premier magazine for consumer and credit professionals. It provides an independent voice to the industry, breaking major news stories and running in-depth features.

As a magazine, it works with and campaigns on behalf of the credit industry to promote its importance as a centre of potential profit and business development to the wider business world.

Subscribe to CCR Magazine

CCR World Magazine


 

Providing information and analysis for thousands of senior credit professionals worldwide, every quarter.

Find out more

GTS Media Ltd
81 Cambridge Road
Southend-on-Sea
Essex
SS1 1EP

Registered in England No: 05483197