The worlds Peer To Peer, Equity Crowd Funding Market is now worth $6.4 billion.
By the end of last year 2013, $6.4 billion was generated in the peer to peer/equity crowd funding markets.
This comes from a recent report compiled by the International Organisation of Securities Commissions (IOSCO) February 2014 staff working paper “Crowd-Funding: An Infant Industry Growing Fast.” The subject of the report examines the insights and implications for users of the financial return crowd funding market.
A project, business or individual loan is funded by small amounts of money obtained by a large number of individuals or organisations through a web based platform. Two types of crowd funding are analysed here, peer to peer and equity crowd funding which come under the heading of financial return crowd funding or FR crowd funding.
Overall the research shows that 96% of FR crowd funding is constituted by the U.S., U.K. and China, of which the U.S. accounts for 51% of the market. 28% by China and the remaining 17% by the U.K.
The total amount combining the FR crowd funding markets of the U.S and U.K. account for $4.3 billion 68%. A market share of 28% being held by South East Asia, South Korea and China take most (95%) of the Asian market with China accounting for $1.8 billion.
Individuals between the ages of 40 and 60 and experienced investors in securities are identified by the IOSCO as being the predominate lenders engaged in the peer to peer lending and equity crowd funding as cited by Pierrakis and Colin in 2013.
Of these investors nearly 40% have experience of 10 years or more working with SME (small and medium size enterprises) of which 83% are male. The report also goes on to say that experienced retail investors are “investing small amounts of money in a great number of projects.”
Although it is still a tiny percentage of the growing global market (0.01%)It is observed by the report that the peer to peer market is growing fast. As of year-end 2013 peer to peer lending was up by 145% over 2012 standing at $2.8 billion.
The year over year growth rate averages at 79.1% and 99.5% for the U.S and U.K. respectively.