Crowdfunding platforms display growth in lending to small businesses
The volume of transactions made on different crowdfunding platforms continued to grow in the last quarter of 2016, reaching a total value of 338.4 million rubles. This was attested through monitoring carried out by the Bank of Russia in cooperation with these platforms, which report to the regulator on a voluntary basis.
Thereby, p2b transactions (project lending by individuals) grew by 51%, exceeding 173 million rubles. The amount most commonly traded ranged from 500 thousand – 1 million rubles and 100 – 500 thousand rubles. The number of signed p2b-lending agreements grew by 64% compared with the third quarter. Monitoring suggests that the surge in this segment results from the increase in business activity of one major market player who is engaged in 62% of all p2b transactions.
In addition, the Bank of Russia registered a sizeable growth in b2b-lending (lending between businesses). Though the total transaction volume amounts to 37 million rubles, this segment displays more than threefold growth compared with the third quarter. This growth is also a result of the increase in business activity of the segment’s major players.
Similarly, the volume of transactions in the p2p-lending segment (lending between individuals) totalled 46.1 million rubles in the fourth quarter, representing more than twofold growth compared with the third quarter. The number of signed agreements worth 100 - 500 thousand rubles in this segment more than doubled. That said, the regulator highlights elevated risks of lending through p2p-platforms as compared with other market segments.
Funds raised through crowdfunding platforms to finance cultural and charity projects totalled 81.5 million rubles in the fourth quarter.
The Bank of Russia draws attention to growth in p2b-lending, in keeping with the regulator’s strategic objective to increase financial inclusion of small and medium-sized businesses through the use of alternative financing, among other things.
The regulator has been monitoring crowdfunding platforms since 2015 in order to assess their development prospects, growth and possible risks. In 2016 voluntary reports were made by more than 10 major platforms which issue loans and support various investment projects.
The reported data suggest that the total volume of transactions in the crowdfunding market amounts to one to two billion rubles and is tending to grow. However, only as many as roughly 10 thousand individuals use these platforms to raise or invest funds.
The Bank of Russia has established a working group to monitor and assess consumer risks and develop proposals on the regulation of the crowdfunding sector. Market representatives number among its members. Currently, the working group is discussing the testing of different crowdfunding models and basic approaches to regulation.