ASIC’s Innovation Hub helps foster innovation that is directed towards the consumer and its survey found that marketplace lending and crowd-sourced funding were rising in popularity.
Marketplace lending, or peer-to-peer lending offers an alternative source of funding for investors and borrowers, while crowdsourced funding helps new and smaller companies raise capital.
The survey found that new borrowing through marketplace lending grew by 45 per cent last year to $433 million, while outstanding loans were up 59 per cent to $518 million.
Respondents reported a total of 13,446 investors and 31,421 borrowers last year but while the numbers were up from the previous year, it does represent a slowing down in the rate of investor and borrower growth.
Crowdsourced funding raised a total of $7.04 million during the survey period, of which 77.5 per cent was raised from retail investors.
ASIC commissioner Danielle Press said the survey helped ASIC to better understand the make-up of the sector and how they could facilitate that growth.
“The surveys help ASIC better understand the make-up of these developing sectors and how ASIC can facilitate their growth while, at the same time, managing any regulatory risks they pose compared with more traditional lending and fundraising approaches,” she said.
Ms Press said that marketplace lending was more established than crowdsourced funding but was starting to slow down.
“While our most recent survey results show ongoing growth in both borrowing and lending activity in the marketplace lending sector, there are some indications that this growth may be moderating.
“Conversely, the crowd-sourced funding industry is in its early stages and is expected to grow further with the recent expansion of the crowd-sourced funding regime to proprietary companies,” she said.
Ms Press said the surveys helped the commission to assess whether technology was still delivering benefits and whether new risks were being created.
“We are committed to facilitating innovation while ensuring investor trust and confidence is maintained, and ‘disruptors’ to the market are held to the same standards as more traditional players,” she said.