Alternative finance market size in Germany 2020, by segment

Peer-to-peer consumer lending was the leading segment in the alternative market in Germany in 2020, with a market value of 803 million U.S. dollars. Another significant segment of the alternative finance market was crowdfunding, which had a total market value of 705 million U.S. dollars. Between 2013 and 2020, Germany saw a continued growth in alternative finance market size.

What is alternative finance?
Alternative finance refers to financial instruments and channels that arise outside of the institutional finance system. One of the main segments of alternative finance is peer-to-peer lending (P2P lending), which enables individuals to obtain loans directly from others, leaving out the financial institution as the intermediary. Another form of alternative finance is crowdfunding, a collective way of raising money for venture projects by asking a pool of individuals for a small amount of money. The size of the alternative finance market in Europe increased significantly over the last few years.

Interest and participation in crowdfunding in Germany
Although the first online crowdfunded project is thought to have occurred as early as 1997, when the rock band Marillion was looking to finance a tour after their album release, interest in crowdfunding only started to grow significantly in the recent years. In Germany, the share of people who knew about crowdfunding increased gradually after 2015. In addition, the number of people who contributed to crowdfunding projects in Germany more than doubled since 2015. This trend is expected to continue, and the crowdfunding global market is forecast to grow significantly in the next years.