The Asia Pacific’s first Alternative Finance survey underway
By Tadhg Walker
The University of Cambridge, University of Sydney and Tsinghua University are collaborating on an inaugural Asia-Pacific alternative finance benchmark survey. The survey will primarily focus on crowdfunding and peer to peer lending activities throughout the region, creating a database to measure size and growth of the sector. Upon publication in the first quarter of 2016 the survey will be freely available to the public.
Similar surveys have been conducted in the United Kingdom and continental Europe, and have had a high impact in identifying growth trends and the size of the alternative finance sector. In the Asia-Pacific region, however, there is currently a lack of empirically based academic research into alternative finance.
Dr Luke Deer, the Research Director at the University of Sydney Business School, said they plan to cast the net as wide as possible to capture as many countries as possible in the Asia-Pacific region, where little is currently known about this emerging sector. This includes China, Japan, India, Thailand, Malaysia, Singapore, Indonesia, Australia and New Zealand as well as countries in the Middle East. In conjunction with other similar regional studies this will help piece together a global picture of the alternative finance sector.
The survey will be looking at three things specifically. Firstly the volume of trade in the alternative finance sector. Secondly the types of financing that are offered, of which there is much variation. Crowdfunding is only one of many alternative finance options. Thirdly the amount of people participating in the sector, whether they are investors, entrepreneurs, borrowers or lenders.
Nations also have varying regulatory schemes, ranging from comprehensive legislation to being largely unregulated. The survey will identify which regulation has most effective in facilitating the alternative types of finance. In this capacity Dr Deer expects the survey will provide valuable information to help countries develop effective legislative frameworks by providing a foundation for evidence based policy making.
The alternative finance sector in China is of particular interest due to market size and potential. Dr Deer estimates there are anywhere between 500 to 2000 alternative finance providers in China. Internet finance has helped the burgeoning alternative finance sector, and the restrictive banking sector. Internet finance has been rapidly expanding, largely driven by ecommerce companies like Alibaba.
The dominant forms of alternative finance in China are peer to peer lending and debt based lending, with an increasing amount of private organisations providing microfinance loans to individuals. There is a “huge demand for it as it is more liquid than other forms of alternative finance such as crowdfunding” according to Dr Deer. This helps local people engage with one another in the community to move ideas forward to fruition. The expanding use of technology, through its ease of scalability, allows lenders and borrowers to collaborate effectively, getting capital to where it is needed.
The intricacies of the alternative finance sector in China and elsewhere throughout the Asia-Pacific region will be explored through this benchmarking survey. It will provide valuable empirical research into the sector, helping companies and countries develop throughout the region.
A link to the survey is contained below:
The survey closes on 18 December 2015.
Crowdfund Vibe is pleased to be one of the supporters the survey. We would like to thank Dr Luke Deer for his time in explaining the survey for the preparation of this article. We plan to report upon the results once they have been released.