Chapter 2: A Regional Discussion on Europe & the United Kingdom
Chapter 2: A Regional Discussion on Europe & the United Kingdom Total Regional Volume From 2013 to 2019 the European online alternative finance market volumes (including the UK) grew consistently from $1.5 billion in 2013 to $23.2 billion in 2019. However, in 2020 our survey reported a drop in overall market volume to $22.6 billion, representing the first decrease in market volume since 2013. Despite this decrease, however, and in the context of the COVID-19 pandemic and Brexit, the market volume reported for 2020 ($22.6 billion) was higher than the volume recorded in 2018 ($18.1 billion).
Though many new platforms were added between the 2018 and the 2019-2020 data collection rounds, some platforms were unable to repeat their participation in the study this year. This implies that the volumes reported may be underestimated and were more likely to have remained stable rather than declined between 2018 and 2020. A further consideration, however, is the appreciation of the Euro against the USD, meaning European volume growth represented in USD may be higher because of this currency effect.
It is worth noting, that the reported decline in part may relate to a number of non-responsive platforms which did not respond to the 2019 and 2020 data collection. The analysis of the European (excluding the UK) dataset was based on 631 firm-level observations in 2019 and 654 firm-level observations in 2020, with just over 100 fewer observations than in historic data collections.
Overall, after removing all platforms that ceased operations before 2020, there were 117 platforms that did not repeat participation but remained in operation in 2019 and2020. Of these platforms, 17 were global14 , while the remaining 100 platforms focused on one or few markets in Europe. While the majority of these were small with little impact on national volumes, some were more substantial.15
Figure 2.1: European Online Alternative Finance Market Volumes 2013-2020, USD (Including UK) $25
Billions
$20
23.2
22.6
2019
2020
18.1
$15
11.9
$10
8.5 6.0
$5
3.8 1.5
$0
2013
2014
2015
The United Kingdom (UK) remained the main contributor to the European alternative finance volume, though accounting for a smaller market share over time. In isolation, the UK market accounts for the third largest market in 2019 and the second in 2020. The UK online alternative finance market has reported consistent annual
70
2016
2017
2018
growth in market volume over the past five years, growing from $4.9 billion in 2015 to $12.6 billion in 2020 and, despite disruptions such as the COVID-19 pandemic and Brexit, the UK alternative finance market grew from $11 billion in 2019 to $12.6 billion in 2020.