The CrowdfundingHub, based in the Netherlands, has published a report on the state of the crowdfunding industry in 27 different European countries. The organization worked with 30 different individuals across Europe to produce the report. The release, coordinated with an event that took place last week, highlights the status of crowdfunding in each of the countries providing a unique insight into the pan-European ecosystem.
“Our research shows that there is a very strong and positive correlations between governments support and industry growth and maturity. We are happy to see that more countries are now adopting legislations for the industry and we expect crowdfunding volumes to increase even further in the coming years.”
It should come as no surprise that elected and appointed officials that support innovation and economic growth can help facilitate the growth of alternative finance. The document highlights a need for a more effective pan-European approach, including terminology, to new forms of finance. Interestingly, the research states that the banking industry has had a wait and see approach and is only slowly entering the sector that is poised to disrupt their current business models.
The document states that equity crowdfunding is possible under existing regulations in most countries. On the debt side, peer to peer lending is prohibited in Belgium and rules vary greatly with some countries allowing fully unregulated P2P consumer lending.
Tax exemptions, that encourage the budding industry, are available in a few countries with the UK leading the way (once again) with their SEIS and EIS programs.
The areas of crowdfunding covered include; peer to peer lending, equity, rewards and donation-based crowdfunding. Recognizing that the UK is leading the charge in embracing financial innovation, the major conclusions of the European research are as follows:
- A government approach that enables progressive regulation and tax reliefs, correlates with high volumes in the industry.
- There is a high level of cross-border activity from successful platforms.
- The research states there is an urgent call for more transparency and independence for aggregated data and a clear European taxonomy.
- Too much focus on volumes can conceal what is really happening in a country.
- There is an urgent need for more transparency and independency for aggregated data and a clear European taxonomy.
- Too much focus on volumes may conceal what is really happening in a country, specifically in unregulated sectors that may be impacted by future rules.
- Volumes will grow as regulation occurs that removes barriers for access to capital thus decreasing national differences in rate of use.
- Optimism prevails across the industry.
The document is a very nice compliment to the work being facilitated by the Cambridge University Centre for Alternative Finance. CrowdfundingHub has put together an excellent high-level perspective of each European country and is a must read for policy makers and industry participants alike.
You may download the report here after you hand over your name and email address.