![]() In reference to the number of loan guarantors, the figure of 68.8% means that 44 of the 64 loans issued have additional guarantees. We stress that the number of workers includes both permanent and temporary employees. The methodology applied in the study is outlined below.įirst, the following mathematical expression is used to determine the risk of the crowdlending investment product: Given the potential of loan-based crowdfunding to become part of the solution to the problems faced by small investors, highlighting the scarcity of investment products, and to increase the democratisation of the financial markets, here we evaluate its impact on a savings portfolio. On the other hand, considering it is a new capital market product and, according to the World Economic Forum (2016), an innovation that would have a greater impact on the financial markets, little research has been done on crowdlending and, even more, from an investment perspective. Loan-based crowdfunding is being consolidated in the Anglo-Saxon countries with more than $4 billion channelized through platforms and penetrating the Spanish market with potential of becoming a part of the solution of the financial market inefficiencies and an efficient risk-return asset for investors who are interested in diversify their portfolio. In this system, individuals, organisations and businesses can raise money to finance their activities through online portals named crowdfunding platforms ( Financial Conduct Authority, 2014). ![]() In this context, along with an increase in the financial culture and the spread of information technology, new innovative vehicles are penetrating the market with households and SMEs as their main targets.Īn example is the new investment and finance vehicle named loan-based crowdfunding, also known as crowdlending, which has quickly made its mark in the financial markets. Measures such as the Bank of Spain's regulation of the upper limits of deposit interest rates in order to reduce the “war for deposits” are justified by the alleged risk to the finance industry, but they may result in other market interferences which mainly affect small investors ( Valverde and Villarroya, 2010). As a result, the search for alternative financial suppliers in Europe is now underway ( Roig and Soriano, 2015). Several studies agree that well-functioning financial intermediaries have a significant impact on economic growth and that there is a positive correlation between economic growth and finance ( Bonin and Wachtel, 2003 Goldsmith, 1969 King and Levine, 1993). ![]() ![]() While banks in the US account for only 19% of long term financing, in the European Union the corresponding figure is 81% ( Cummings, 2013). Moreover, these market inefficiencies are increased by an environment characterised by low interest rates, the strong negotiating power of financial suppliers with respect to SMEs and small investors because of the low number of organisations with systemic risk, and a European financial market that is highly dependent on its banking institutions ( Giralt and González, 2012). Several of the innovative products mentioned above, for example, are beyond the reach of small and medium enterprises (SMEs) and households, and investment and finance alternatives for relatively small portfolios or small turnover companies are limited. ![]() However, financial markets present inefficiencies. The increasing availability of information via the new technologies has resulted in a vast range of new forms of mortgages and of consumer credit, futures, options, swaps and other risk management vehicles, new forms of health insurance, and innovative ways of making development loans ( Shiller, 2009). The financial markets have developed rapidly since the second half of the twentieth century. ![]()
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