A breather or a turning point?
For the first time in the history of Crowdlending in Switzerland, the market volume no longer recorded an increase in 2022. Compared to the record value of 2021, the volume fell by 18 percent. Nevertheless, the volume is still significantly above the value of 2020. The latest publication of the Crowdfunding Monitor by the Lucerne School of Business once again discusses the market development of crowdlending in Switzerland.
Crowdlending for SMEs grows
With the exception of corporate debt financing, the volumes of all crowdfunding segments have declined. SME crowdfunding grew by 28 percent to 141.9 million Swiss francs in 2022. Loans via platforms to SMEs have already been growing continuously for years. However, the market development of this segment was interrupted by the Covid crisis and the corresponding Covid loans in 2020. In this respect, SME financing is now back on its former growth path. The volumes of real estate crowdlending and consumer crowdlending declined slightly.
Adjusting screws for future growth
The authors of the HSLU study identify two areas that represent important prerequisites for future market growth. First, the involvement of institutional investors will be key to securing a more significant supply of capital. So far, it has not been possible to attract institutional investors on a significant scale. A lot of education is still needed for traditional financial institutions, venture capital firms and business angels as well as traditional institutional investors to recognise the potential of crowdfunding as an investment opportunity.
Another crucial factor for the growth of capital demand is the level of awareness of crowdlending as a source of financing, especially in the area of business loans and consumer loans. Increased awareness and knowledge among potential borrowers could drive growth. Many businesses refrain from applying for a loan from a bank despite the need for financing because they are concerned, for example, that the interest costs are too high or that they would not receive a loan. Using crowdlending as an alternative source of credit could help alleviate these concerns. In the area of consumer credit, many individuals may not yet have realised that crowdlending offers attractive interest rates compared to other options.
You would like to know more?
The Marketplace Lending Report 2023 will be published later this year. It provides information on its members’ risk and return figures, the number of loans issued during 2022 and takes a broader look at Switzerland’s online debt market, including all forms of Marketplace Lending in Switzerland.
For now, you can read the full Crowdfunding Monitor 2023 or you can visit our statistics section for more details.