France | Current State of Alternative Finance 2020
Florence de Maupeou
Florence is CEO of association Participative Financing France. She is specialised in strategic development, administrative and financial management, recruitment and federation of members, internal and external communication, advocacy, project management, organization of meetings and working committees, events, interventions and training.
An estimation on market volume in France?
In 2019, the French alternative finance market volume is more than €600 million, which has increased 50% compared to before.
Which online AltFin models are frequently used?
The following models are frequently used:
- P2P Business Lending
- Balance Sheet Business Lending
- Equity-based Crowdfunding
- Reward-based Crowdfunding
- Real Estate Crowdfunding
- Donation-based Crowdfunding
What are the leading platforms?
There are 6 outstanding platforms in terms of financing volume, market influence and popularity:
- October: €130 million including its loan funds
- Clubfunding: €78 million real estate crowdfunding platform
- KissKissBankBank & Ulule: the 2 most popular reward crowdfunding platforms
- Lendosphere: €21 million collected in 2019 for renewable energy (the biggest platform in that sector)
- MiiMOSA: €10 million collected for agricultural projects
Can you list some successfully financed projects?
Here are 3 recent projects in France:
- MASCARA project on WiSEED plateform for the Desalination of sea water: equity fundraising for €666 000 in just 30 days thanks to 784 investors.
Read more about MASCARA
- CORAIL on Ulule platform for a basket woven from plastic bottles caught in the sea: 2 883 presales upon an objective of 300 (961% of the initial objective).
Read more about CORAIL
- Property agent Confidentiel Paris 2 with Clubfunding & Fundimmo: association of 2 platforms from real estate sector to finance an operation up to €6 million.
Read more about Confidential Paris 2
What are the leading Crowdfunding / FinTech associations?
Created in August 2012, Financement Participatif France is the association representing crowdfunding actors in France. It brings together around sixty platforms and as many members of the ecosystem: support structures for project leaders, banks, business angel networks, lawyers, students etc.
Are there any governmental programs / projects promoting Alternative Finance and Crowdfunding?
Yes. Over the years, regular discussions are organised by the government to improve crowdfunding regulation and enable more activities.
Are there any research centres and/or projects collecting data on AltFin?
As mentioned before, Participative Financing France (French: Financement Participatif France, FPF) collects data and information on alternative finance.
FPF will publish the collected datas on Feb. 20, 2020. You can also check out our recent publication of FinTech observatory.
Are there any tax incentives for AltFin investors?
Investors have the opportunity to keep their shares in a saving plan to deduce the taxes on the capital gain.
How is the AltFin industry regulated? Are there any regulations & legislations?
Yes, the French AltFin industry is under regulation. Here is an introduction from The 3rd European Alternative Finance Industry Report by University of Cambridge:
France has been a leader in setting European expectations for FinTech focused regulation… Platforms within France were asked to indicate their perception towards existing regulation.
…Approximately 80% of all equity models (i.e. Equity-based Crowdfunding) viewed regulation as ‘adequate and appropriate’, though 20% viewed it as ‘expensive and too strict’.
Read more about The 3rd European Alternative Finance Industry Report
Please give some forecasts of Alternative Finance in the next 5 years
Global trends are expected to continue in the years to come, with a preponderant place of the real estate sector and the renewables energies field, in response to a real appetite on the part of the French. If certain barriers are removed, the agricultural field and projects carried by local collectivities should increase as well. It can be guess that the next couple of years will see bank rates rise to leave more room for crowdlending for SMEs. In addition, we will hopefully see the emergence of more and more French platforms as European leaders with the implementation of the regulatory harmonization.