The European Parliament has released a study which frames the status of crowdfunding in the EU. Key results from various researches showed that despite being in its relative infancy when compared to more conventional methods of financing, crowdfunding has experienced notable growth and maturity in recent years. However, its presence remains concentrated in the handful of countries, in which tailored domestic initiatives have been introduced to augment its growth.

The study “Crowdfunding: Mapping EU markets and events” (EP, 2015) highlighted, in fact, increasing adoption rates across the UK, France, Germany, Italy and the Netherlands. The UK had the largest number of platforms, accounting for 28% of the EU total. Platforms employed a diverse range of funding mechanisms, with the most prevalent methods of return arriving in the form of rewards (30.4 %), equity (22.9 %) and loans (21.0 %).

If, on one hand, national initiatives on crowdfunding fostered the phenomenon locally, on the other hand, they hampered the opportunity for cross border activity, thus preventing the creation of a pan-European crowdfunding market.

This is not the first research activity on crowdfunding by a European institution. In past years, the EC has released a communication and two reports and the European Parliament has approved three resolutions. This activity was also partly facilitated by ECN’s ability to start a dynamic dialogue on the topic and to provide insightful data on the industry through its publications.

The present study, which you can download here, reaffirms the belief that EU policy intervention is not yet required, given that the phenomenon is still largely a national one. However, as crowdfunding holds the potential to become a major form of finance for SMEs over the long term, its status will be consistently monitored by European supervisory authorities and Member States to ensure it fulfils its potential.

This article was published by European Crowdfunding Network on 26th January 2017.