The new Crowdfunding Monitor 2024 from Lucerne University of Applied Sciences and Arts (HSLU) has been published. Every year, the university's Institute for Financial Services Zug IFZ publishes a new development report on crowdfunding in Switzerland. This report includes key data on established crowdfunding sectors, including crowdlending, crowdinvesting, and crowddonating. The monitor aims to increase transparency in these sectors.
In the following article, we focus on crowdlending and explain the most important developments that all lenders and borrowers should be aware of.
Review and developments of the past year regarding crowdlending
The Swiss crowdlending market declined by 20 percent in 2023, mirroring the previous year's decline, with the volume falling from CHF 497.5 million to CHF 398.1 million. Despite this decrease, crowdlending remains the largest segment of the Swiss crowdfunding sector.
Business crowdlending (SME loans), which amounted to CHF 132.8 million in 2023, saw a slight decline (-6.4%) compared to the previous year (CHF 141.9 million in 2022). Consumer crowdlending (personal loans) followed a similar trend, falling by 15.8% from CHF 72.9 million to CHF 61.4 million. The decline was most pronounced in the real estate crowdlending sector, with a drop of 27.9% to CHF 203.9 million.
Contrary to the trend in crowdlending, Cashare was able to grow by 7% in 2023, thus leaving the overall market behind by over 27%.
Average loan amounts varied by segment in 2023. For SME loans, the average volume was around CHF 235,000, for consumer crowdlending it was approximately CHF 39,500, and for real estate crowdlending it was around CHF 960,000.
The main decline has therefore been in the number of mortgage loans, which can be seen as a consequence of the sensitive global economic and financial situation. Since the beginning of 2023, mortgage financing in Switzerland has come to a virtual standstill. This was attributed to uncertainties regarding interest rate trends and inflation. Positive developments are expected in this area again in the coming years.
The developments at Cashare illustrate that it is insufficient to draw conclusions solely from the overall trend. We are currently observing a consolidation among market participants. The volume appears to be declining in some areas where previous market participants granted loans too readily. This was possible because, during periods of low interest rates and a strong economy, funds were attracted to certain platforms that may not have been adequately invested in loan quality. These funds are now flowing out as investors are once again investing more carefully and with a focus on quality. Nevertheless, Cashare, as a pioneer in crowdlending, has been able to accumulate extensive experience with changing economic conditions since its founding in 2008.
This allowed us to gather experience and data during the financial, real estate, and Eurozone crises, supporting our conservative lending policy and developing it sustainably using proprietary algorithms. Consistent application ensured that loan quality remained stable and was not subject to excessive fluctuations. Platforms established after 2015, in particular, may not have had access to this data and expertise.
What were crowdlending loans needed for?
The intended uses of the loans also vary considerably. Business crowdlending often focuses on project financing, debt restructuring, or short-term liquidity. Consumer crowdlending primarily uses loans for debt restructuring, education, cars, travel, or weddings. Real estate crowdlending provides interim financing for property developers; many of these loans are short-term and are later repaid by banks.
Conclusion
Cashare thus performed positively in 2023, bucking the market trend.
Despite the decline, crowdlending remains an important source of financing for companies, individuals, and real estate developers in Switzerland. In 2023, a total of 36 crowdfunding platforms were counted in Switzerland, but only 23 of them hosted funding campaigns. The pioneer with the longest experience is Cashare, which continues to offer attractive interest rates as one of the largest platforms in Switzerland, reaching a broad audience.
Do you need a loan for business or personal purposes? Loan seekers can find information in just a few steps at www.staging.cashare.ch Submit a loan application. Completely without obligation or risk, try us out!
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Wishing you much joy and success
Team Cashare
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