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How does the alternative finance industry in the United States compare to Europe?

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It is fair to say that each geographic market is growing at its own pace, depending on attitudes, trends, and the adoption of technology.

In this post, we will examine alternative financial markets in the United States, Europe, and the United Kingdom, and ask why the last two are lagging behind.

A look at the numbers: how America has become the largest alternative finance market

In terms of net results, the alternative finance market in the United States was worth $ 38 billion in 2015, after growing 213% year-on-year. In contrast, the UK market had a corresponding value of $ 4.5 billion, while it also posted 84% year-on-year growth.

While these figures suggest that the UK market is growing at a much slower pace than in the United States, the European sector is still lagging behind. Despite the fact that the market grew 72% from one year to the next in 2015, it rose from a relatively modest starting point of $ 668 million (reaching $ 1.1 billion). of dollars).

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From these figures, we can draw some obvious assertions. First, the alternative finance industry is an industry that continues to thrive around the world, with particularly striking growth rates in recent times. Despite this, it is clear that the United States dominates the market and is leading the way for other countries, particularly with respect to the most popular and profitable niches.

What can we learn from the growth of the US market?

The alternative finance market includes a variety of different niches, such as consumer credit, crowdfunding, balance sheet lending and invoice trading. This is the first that serves as the heartbeat of the US market, however, consumer loans being by far the most important sector of the industry. This niche has certainly benefited from considerable demand since the Great Recession as consumers began to look for flexible lending options in an increasingly regulated market.

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U.S. companies were the first to take advantage of this demand, while consumer loans in the markets now account for 36% of the European market as a whole.

Although this is just one example of how the European and British markets have followed in the footsteps of the United States, some recent developments have resisted this trend. In Europe and the United Kingdom, for example, billing has quickly become the fastest growing sector as companies seek to fill a growing gap in the international market. In Europe, this sector has experienced an impressive growth of 1057% between 2014 and 2015 (from $ 7.8 to $ 90 million), while the UK bill trade is now worth $ 433 million.

On the other hand, billing has a relatively low market value in the United States, with a total volume of only $ 32 million in 2015.

The bottom line

As we can see, alternative finance is a huge business in the global market, while the United States (which is known as the home of this concept) continues to pave the way for others. Both the European and British markets have experienced considerable growth since 2014, with these regions taking advantage of opportunities in lesser known niche markets such as billing.

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