Higher rates, higher risks

Crowdfunding on an unsustainable trajectory


The loan crowdfunding market doesn't have the best interest of SMEs at heart – or those of lenders. Average interest rates are rising and now often exceed 8%. Only the platforms benefit from this trend.

In cooperation with Marco Behling, CEO of Catena Investments, and Prof. Armin Schwienbacher, Univ. of Lille and SKEMA Business School, Symbid has identified three key challenges. By addressing these issues, we believe crowdfunding can fill the funding gap left by stagnation in bank financing.

Key challenges:

  1. Lack of transparency
  2. Current risk scoring & pricing models can be subjective & lack financial insight
  3. Unsustainable interest rates
  4. Interest rates are being pushed higher, raising the debt burden on businesses
  5. Limited understanding of risk
  6. Crowdfunding investors are susceptible to prioritising the interest rate & ignoring risks


 

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