Crowdfunding penalized by high rates and the search for more creditworthy borrowers

Crowdfunding penalized by high rates and the search for more creditworthy borrowers
Crowdfunding penalized by high rates and the search for more creditworthy borrowers

Published on May 15, 2024 at 10:28.

After its peak in 2021 at 792 million, favored by the pandemic, crowdfunding experienced a second year of decline in volumes financed in Switzerland last year, to 558.7 million francs (-15% over one year). But the different approaches to crowdfunding have experienced divergent trends, shows a study by the University of Lucerne published on Monday. Funding closer to support or philanthropy was maintained, while that aimed at financial return declined, in particular loans (-20% compared to 2022). Higher interest rates have led to higher crowdfunding costs, reducing the number of potential customers as online platforms seek out more creditworthy profiles.

First of all, crowdfunding in the form of donations or with counterparty – “crowddonating” and “crowdsupporting” in financial jargon – remained stable last year, at 29 million francs. “We are talking here about financial support provided to creative projects, with an average amount of 180 francs per participant, in exchange for which they receive a copy of the work they have financed, for example a book or a work of art,” summarizes Simon Amrein, co-author of the study, based on figures provided by the 23 crowdfunding platforms active last year in Switzerland.

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