European online alternative lending market volumes have grown steadily year-on-year between 2013 and 2015, with the average growth rate sitting at 73 per cent.

The UK is the market leader when it comes to alternative finance, as the nation has four times higher volumes in aggregate than the rest of mainland Europe, according to a new report from KPMG and peer-to-peer lender TWINO.

Nonetheless, the key geographical market for European alternative online lending platforms is still Continental Europe, where lenders are increasingly taking up niches in both the sub-prime and prime unsecured lending segments, the research indicates. 

Peer-to-peer - colloquially known as P2P - lending remains the largest component of the alternative online lending market and comprised 72 per cent of the entire market in the first three quarters of this year.

Crowdfunding is another key source of alternative finance. One of the major players within this sector, Kickstarter, was founded in 2009 and has since been used by tens of thousands of business start-ups to entice investors into funding new ventures in exchange for a product or stake in the company. Projects like these often place next-generation high net worth individuals in the pipeline and are therefore of interest to both wealth managers and their clients. 

European online alternative lending market volumes have grown steadily year-on-year between 2013 and 2015, with the average growth rate sitting at 73 per cent, according to the report's findings.

Given the example of the UK market development, Continental Europe expects further “significant” growth, as it now only comprises a “minor part” of the total unsecured lending in the region, the report stated.

“Currently, we’re seeing how new technologies are making it possible for smaller countries to successfully compete with well-established players in the market; the alternative finance sector is a key example of this. It's clear that a nation's size and geographic location is of far less importance than a successful strategy to attract investors and issue loans,” said Jūlija Masāne-Ose, KPMG Baltics deal advisory director.