In recent years, interesting alternative forms of financing such as crowdlending and crowdfunding have emerged to provide the underserved European SME market with debt and equity financing. However, these alternative solutions have been hampered by a missing link in their distribution: SME advisors.
This missing link partly explains why Southern, Central and Easter European regions are lagging behind Northern and Western European regions in terms of alternative finance. In those countries SME entrepreneurs still rely on traditional in-person advisors to help them source the funding they need for their business. While these advisors have ties with the traditional financial ecosystem, they often have little or no knowledge of alternative finance solutions and the firms which provide them.
The Altfinator project was set up to correct this. Its goal is to provide SME advisors with information and training by transferring the best practices from more advanced markets such as the US, the UK and the Netherlands to less advanced markets in Southern, Central and Eastern Europe. Initially, the project focuses on 8 countries: Portugal, Spain, Italy, Lithuania, Poland, Slovakia, Hungary, Romania, Ukraine.
The information dissemination and education efforts target the entire support system of innovative SMEs which includes start-up networks, business accelerators, traditional SME advisors, such as accountants, financial intermediaries, traditional financial institutions, as well as policy makers. The goal is to train and educate approximatively 5.000 of these SME advisors in the first 2 years
The project is conducted by an international team of 11 partners, consultancies and academic institutions with in-depth knowledge of alternative finance. These are: Civitta, a large international consultancy from Estonia with a presence in the Baltic Countries, Central & Eastern Europe, and the UK (project lead), CrowdfundingHub from the Netherlands, Zabala Innovation Consulting from Belgium, Innomine Group from Hungary, Mediapark from Lithuania, University of Manchester from the UK, Politecnico di Milano from Italy, Loba from Portugal, Docomo Digital from the UK/Japan, Pedal Consulting from Slovakia, and ECWT from Norway.
“Our research showed that traditional and new SME advisors were a bottleneck for crowdfunding. They lacked knowledge and experience of alternative finance…The Altfinator project is a good way to make sure that SME advisors and platforms better find each other and help provide more funding to SMEs,” said Ronald Kleverlaaan, Managing Director, CrowdfundingHub
The European Commission is providing Altfinator with 1.5 million euros in co-financing for the first two years as part of the European Horizon 2020 program.
Most recently, the team met with its Advisory Board and presented its project to European start-ups and Alternative Finance experts at the Bratislava TechSummit, the largest CEE technology-innovative conference.
After the initial phase, the training will be expanded further through national and local organizations in other countries.
Therese Torris, PhD, is a Senior Contributing Editor to Crowdfund Insider. She is an entrepreneur and consultant in eFinance and eCommerce based in Paris. She has covered crowdfunding and P2P lending since the early days when Zopa was created in the United Kingdom. She was a director of research and consulting at Gartner Group Europe, Senior VP at Forrester Research and Content VP at Twenga. She publishes a French personal finance blog, Le Blog Finance Pratique.