In its 2024 banking barometer, the Swiss Bankers Association (SBA) notes that the overall development of banks in Switzerland in 2023 was positive (see Banks with positive overall performance and continued good outlook despite decline in interest margin – Press releases – News & Positions – SwissBanking).
However, according to expert forecasts, the prediction of below-average credit growth in 2024, accompanied by a lower supply of real estate and stronger regulations, could encourage borrowers to turn to crowdfunding as an alternative to traditional financing.
The following explains how this dynamic could facilitate the rise of crowdfunding in Switzerland:
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Fewer opportunities for traditional loans.
Given the limited growth in mortgage lending projected for 2024, there is a risk that some real estate projects will not receive sufficient financing from banks. Crowdfunding platforms can therefore position themselves as attractive alternatives for real estate developers or individuals seeking to finance their projects.
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Diversification of funding sources
The trend of business loans increasingly being provided by non-banks is opening the market to non-traditional players. Crowdfunding platforms, operating outside the traditional banking framework, can offer direct and transparent financing solutions. These platforms are positioning themselves as viable alternatives to the limitations of classic bank loans.
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Flexibility and speed
In an environment of increasingly stringent regulations and frequent legal challenges, crowdfunding stands out for its flexibility and speed. Unlike traditional banks, crowdfunding platforms can offer less bureaucratic financing solutions, allowing borrowers to bypass some of the hurdles associated with conventional loans. This agility is particularly advantageous in sectors like real estate, where rapid financing can be a crucial factor for success.
Conclusion
All in all, the current environment creates a fertile breeding ground for the development of crowdfunding in Switzerland as a response to the challenges of the traditional credit market.
