CrowdLending (Business) - Switzerland

The total transaction value in the Crowdlending (Business) market market in Switzerland is expected to reach US$26.04m in 2024.
When comparing globally, it is evident that China will have the highest transaction value, reaching US$16bn in 2024.
Switzerland's CrowdLending market is gaining traction among small and medium enterprises seeking alternative capital raising options.

Definition:

Crowdlending platforms, otherwise know as lending-based Crowdfunding enable small and medium-sized enterprises to get loans from single or multiple, private and institutional investors via an online brokering platform. On credit platforms such as Funding Circle, OnDeck, Kabbage and Lending Club, businesses can obtain small loans up to a set maximum value. As a rule, financing requests are analyzed by the provider via an internal scoring system and are checked against additional minimum requirements such as turnover. Subsequently, these financing requests can be invested in by private and institutional investors at an appropriate interest rate determined by the credit rating of the company. This makes it possible for SMEs to borrow quickly and easily, as the basic requirements for obtaining finance are more flexible compared to traditional bank loans.

Alternative financing for SMEs and freelancers (bank-independent loans)
Small business loans issued by single or multiple private and institutional investors (non-banks)
Online loan request, scoring and approval

Traditional bank loans
Consumer loans and credit card transactions
Business-to-Business credit scoring and rating services
Online marketplaces for consumer loans (see Marketplace Lending)

Switzerland, known for its strong financial sector and stable economy, has seen significant growth in the CrowdLending (Business) market in recent years. This market, which connects businesses in need of financing with individual investors, has become increasingly popular due to several customer preferences and local special circumstances.

Customer preferences: Swiss businesses have shown a growing preference for CrowdLending as a source of financing. This can be attributed to the speed and convenience offered by online platforms, which allow businesses to access funds quickly and easily. Additionally, many businesses appreciate the flexibility of CrowdLending, as it offers a range of loan sizes and repayment terms to suit their specific needs. Furthermore, the transparency and direct communication between borrowers and lenders in the CrowdLending market is highly valued by Swiss businesses.

Trends in the market: One of the key trends in the Swiss CrowdLending (Business) market is the increasing diversification of investors. As more individuals become aware of the potential returns offered by CrowdLending, they are allocating a portion of their investment portfolios to this asset class. This trend is driven by the low interest rate environment in Switzerland, which has made traditional investment options less attractive. Additionally, the rise of digital platforms has made it easier for investors to participate in the CrowdLending market, further fueling its growth. Another trend in the market is the emergence of specialized lending platforms catering to specific industries or sectors. These platforms understand the unique needs and risks associated with different businesses and are able to offer tailored financing solutions. This trend has gained traction as businesses seek financing from lenders who have a deep understanding of their industry and can provide customized terms and conditions.

Local special circumstances: Switzerland's reputation as a global financial hub has contributed to the growth of the CrowdLending (Business) market. The country's strong legal and regulatory framework, as well as its stable political and economic environment, have instilled confidence in both borrowers and lenders. Swiss businesses are more willing to seek financing through CrowdLending platforms due to the trust and credibility associated with the Swiss financial system.

Underlying macroeconomic factors: The Swiss CrowdLending (Business) market has also been influenced by underlying macroeconomic factors. The low interest rate environment in Switzerland has incentivized businesses to seek alternative sources of financing, such as CrowdLending, to access capital at more favorable rates. Additionally, the strong Swiss franc has made it more difficult for businesses to export their products, leading to a greater need for financing to support domestic operations and expansion. In conclusion, the CrowdLending (Business) market in Switzerland is experiencing significant growth due to customer preferences for speed, convenience, and flexibility. The market is also driven by the increasing diversification of investors and the emergence of specialized lending platforms. Switzerland's reputation as a global financial hub and favorable macroeconomic factors further contribute to the growth of this market.

Data coverage:

The data encompasses B2C enterprises. Figures are based on transaction values / revenues / assets under management and user data of relevant services and products offered within the FinTech market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending, population, internet penetration, smartphone penetration, credit card penetration, and online banking penetration. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

Crowdfunding is the collective effort of a large number of individuals who network and pool small amounts of capital to finance a new or existing business venture. Each campaign is set for a goal amount of money and a fixed timeframe, each day is counted down and the money raised will be tallied up for visitors to follow its success. The size of the global crowdfunding market is growing and the largest markets are North America and Asia.