Non-bank lending to grow by a quarter predicts survey

A survey of institutional investors by Amicus Finance also shows that 64 percent of institutional investors believe that SMEs are too dependent on bank funding.

A group of European institutional investors predict that the alternative finance market will grow by 23 percent over the next 24 months, according to a survey.

Carried out by short-term credit provider Amicus Finance, the survey shows that investors expect growth to be driven by demand for expansion finance from small-to medium-sized enterprises (SMEs).

Seventy-three percent of investors surveyed believe that appetite for investing in the non-bank market will grow over the next two years, as a result of attractive risk-adjusted returns.

The results are based on responses from 111 pan-European institutional professionals covering a broad range of sectors surveyed between 29 May and 15 June 2015.

Three quarters of investors also said that the non-bank finance market could increase the resilience of the financial system, while 64 percent said that UK and European SMEs are too reliant on traditional bank finance.

John Jenkins, chief executive officer of Amicus, commented in a statement: “As the economy continues to recover, institutional investors see a strong opportunity for the capital markets to play a bigger role in financing SMEs, which continue to face capital constraints due to bank deleveraging.”

Amicus Finance is owned by Omni Partners. The London-headquartered investment manager specialises in bridging loans secured against UK residential and commercial property. Amicus, initially known as Capital Bridging Finance, has underwritten around 750 loans with an aggregate volume of £450 million (€637.5 million; $699.4 million) since inception in 2009.

This story was updated on 17 August to correct the percentage growth expected and remove an inaccurate figure.