Peer to peer finance platforms for small businesses can become the equivalent of a small business bond market, giving them access to highly liquid markets ad providing a much needed alternative to bank lending
Transcript of "A better access to finance for SME's with online peer-to-peer finance"
1<br />EmpoweringSMEs to betteraccess to finance :<br />the example of online peer-to-peer finance<br />“Benefits of the Digital Agenda for SMEs”<br />ACCA and UEAPME<br />EuropeanParliament <br />6 October 2011<br />Jean-Christophe Capelli, CEO, FriendsClear.com<br />
A supportive environment for a new system of financing businesses : online peer-to-peer finance<br />Banking system in crisis : risk-aversion among “plain old’” providers of finance<br />A general resurgence of entrepreneurs and entrepreneurship<br />Low interest rates offered by saving accounts + lack of attractive financial products for personal investors<br /> Rise of “social” or “peer to peer” (p2p) finance, where individuals rather than financial institutions lend to or invest in small businesses<br />2<br />
Experiencefrom the field : whatisworking ?<br />Benefits traditionally associated with online disintermediation<br />Banking costs are cut<br />Due diligence are performed by a collaborative work between investors<br />Social networks allow to leverage an unprecedented volume and depth of information on entrepreneurs and their projects<br />No middleman : better return for investors / cheaper access to finance for entrepreneurs<br />Loans default rates kept low (peer pressure)<br />12<br />
Experiencefrom the field : whatneeds to beimproved ?<br />Lack of standardisation (believe it or not) among european countries<br />Banking regulations are VERY different among europeanscountries<br />Consumer regulations are different (as far as banking services are concerned)<br />The importance of financial transparency in an online world. <br />Need for better (positive) credit scoring / rating in some european countries (both for entrepreneurs themselves and SMEs) <br />Hi-quality financial reports and forecasts are required (even for SME’s)<br />13<br />