SWITZERLAND - CROWDFUNDING HAS SURPASSED THE HALF-BILLION MARK

When it comes to crowdfunding, the Swiss are most generous towards start-ups and SMEs. Growth is driven by crowdlending (loans) and crowdinvesting (investments), which generated 261.9 million (40%) and 204.9 million (52%) respectively last year.

SMEs have always played a very significant role in Switzerland, as the country is one that truly fosters entrepreneurship.

However, for those without sufficient start-up capital (seed money), launching a business in the world’s most expensive country can prove impossible or particularly risky... Banks, despite all their good will, are increasingly constrained by their regulatory bodies and can no longer take the slightest risk on a start-up... Or else they do so under conditions that are impossible to meet and require such lengthy analysis processes that they become unfeasible.

Crowdfunding will likely be the economy of tomorrow for a whole host of small investors who, by pooling their resources on an innovative project or on yield-generating investments (such as property), can move very quickly and achieve what the traditional economy can no longer do

The future is set to become very interesting for those who dare to invest wisely...

Alain Farrugia

Most of the funds raised do not go to cultural or sporting projects, but are used to provide loans to small and medium-sized enterprises (SMEs) and to finance start-ups, according to the ‘Crowdfunding Monitor’ published on Monday by the Lucerne University of Applied Sciences and Arts.

By way of comparison, this method of financing accounted for just 27.8 million francs as recently as 2015. Since its emergence around ten years ago, it has raised a total of approximately 1.1 billion.

Growth is driven by crowdlending (loans) and crowdinvesting (investments), which generated 261.9 million (40%) and 204.9 million (52%) respectively last year. Crowdlending allows loans to be granted to businesses or individuals, with returns paid in the form of interest. Crowdinvesting offers the opportunity to invest in companies or property and to share in the distribution of profits.

Donations to cultural or sporting campaigns, however, fell by 12% to 25.6 million francs, even though the number of projects increased, notes the Lucerne-based institution. According to the study’s authors, the crowdfunding market is expected to see double-digit growth once again in the current financial year, with an anticipated volume of between 700 and 900 million francs.

In an international comparison, Switzerland ranks among the leading crowdfunding markets, with a per capita contribution of 61 francs, significantly higher than that recorded in neighbouring countries.

Source: 20 Minutes