Crowdfunding: what changes in the financing market


How crowdfunding integrates the system of traditional financing channels

From the moment crowdfunding began to spread in any country, new lenders and new investment opportunities have established themselves in every market, integrating the traditional system of loans granted by banks.

Crowdfunding, let us remember, represents an alternative financing channel that allows a multitude of indistinct subjects to support projects and new businesses, which otherwise would not have been able to take advantage of the solutions granted by banking institutions.

In particular, an accomplice of his affirmation was the technology , which allowed the rapid proliferation of specialized web platformsable to welcome new projects and to quickly communicate supply and demand . However, to understand the reasons behind its spread and success, we must start from the circumstances that favored its birth.

When and why crowdfunding was born


The crowdfunding sector, we can say, has experienced rapid development starting exactly from the years of the great financial crisis of 2008 , which ended up negatively upsetting the global economy first and then, inevitably, the entire real economy .

This crisis, which began in 2008, has therefore put the SME sector in particular , at a time when banking institutions have proved increasingly reluctant to grant loans and loans, heavily tightening the criteria with which to evaluate the merit. credit. So it was that in the period between 2009 and 2013, the disbursement of loans and financing dropped drastically by 4.1% (source: ISTAT) causing a strongly negative impact on the whole real economy.

Consequently, over the years, the financing methods have greatly changed with the emergence of alternative financing instruments , such as crowdfunding, which drastically reduce the dependence on bank credit of applicants and offer more innovative and more ” democratic “.

In detail, the effects of the financial crisis triggered the phenomenon of the Credit Crunch , which literally means “ credit crunch”, Which has made it necessary over the years a general rethinking of the financing systems available above all to small and medium-sized enterprises, which constitute a large slice of the Italian entrepreneurial fabric.

In fact, at the most difficult moment of the crisis, there were no financing instruments on the market for SMEs that could represent a credible alternative to bank credit. Therefore, having taken note of the banking structural weakness that had arisen, the need arose to devise a new “financial philosophy” and to provide for the provision of new complementary financing instrumentsto traditional ones to make it easier to finance SMEs and other businesses. Furthermore, among these, crowdfunding has made its way especially among young entrepreneurs, very often without their own capital and guarantees to offer to banks.

Lending platforms become new payment institutions

The emergence of crowdfunding among traditional financing systems was undoubtedly favored by greater attention to the regulatory regulation of lending crowdfunding .

In particular, the entry into force of Legislative Decree 11/2010 , implementing the European Directive 2007/64 / EC, allowed the Bank of Italy to classify lending crowdfunding platforms under the category of payment institutions, effectively establishing a new category of operators, coming from non-financial sectors authorized to carry out payment orders.

Subsequently, in 2016, the Bank of Italy issued a new provision with Resolution 584/2016containing further provisions for the collection of savings from entities other than banks . This measure, specifically, was aimed at framing alternative forms of financing to the traditional banking channel from a regulatory point of view, establishing social lending , with which new lenders come into play , including small savers or institutional investors.

Therefore, if on the one hand the activity of the platform manager is authorized as a  provision of payment services , the collection of funds is authorized when lenders and applicants are able to observe the contractual obligations by implementing a personalized negotiation..


With Equity Crowdfunding, financing opportunities for SMEs are growing

The first country in Europe to have regulated equity crowdfunding from a regulatory point of view was Italy. In this case, the legislation has therefore created new investment opportunities for companies that need funds to start their activities, with the aim of giving a substantial boost to the entire Italian economy. 

Although, initially, the legislation was aimed exclusively at companies with the qualification of “innovative start-ups”, it was in 2015 the year in which, through Legislative Decree no. 3 of 24 January that the phenomenon was also extended to the category of “innovative SMEs”.

Finally, we will have to wait until 2017 for Equity to be extended to all SMEs through theLaw Decree n. 50 of 24 April 2017 .

On the other hand, starting from 2019 , with Law 148 of 30 December 2018 , special tax deductions on invested capital were provided for both individuals and legal entities. For individuals, an IRPEF deduction has been provided with a rate of 40% up to an investment of € 1,000,000 per year, while for legal persons an IRES deduction of 40% has been provided on an annual investment equal to € 1,800,000 .


Crowdfunding and banking institutions: a possible collaboration


Since its emergence in the finance market, crowdfunding has received little or little consideration from banking institutions. However, over time, given its evident growth, banks have begun to perceive the strategic role that this new form of collective finance could have assumed in the wider financial market, opening the doors to possible operational agreements.

This type of collaboration, between banks and fintechs, is therefore a very profitable path for both parties involved. In fact, while a possible agreement allows banks to reach particular customer segments of credit applicants with the increase of new investment opportunities, credit platforms allowexpand the range of services offered such as the creation of securitisations and the differentiation of loan types , thereby increasing revenue streams.

As an example, in Italy there are 3 banks that have included equity crowdfunding in their services: Banco BPM, Banca Etica and Intesa San Paolo .



Today the alternative finance market, and in particular crowdfunding, is growing exponentially: by multiplying the opportunities for accessing credit and significantly increasing the number of lenders, crowdfunding is confirmed as the new engine of the real economy


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