The French Market for Peer-to-Peer Lending
France has been the largest market for alternative finance in continental Europe since 2013. In the latest report from the Cambridge Centre for Alternative Finance (CCAF), France had a funding volume from alternative finance of €661.3 million, which corresponds to a market share of 19.6% in continental Europe. In a worldwide perspective, this places France as the country in the world with the seventh-largest funding volume from alternative finance. From this funding volume, €410.7 million came from P2P lending, which also places France as number 1 in continental Europe in this category, closely followed by Germany. However, looking at the whole European region, France still has a long way to go before catching up on the United Kingdom.
Best Peer-to-Peer Lending Platforms in France
Here, you will find a list of the best peer-to-peer lending platforms in France. When choosing the best peer-to-peer lending sites in a country we consider a variety of factors that you can find in the Methodology below.
More P2P Lending Platforms in France
Below, you will find a list of the remaining peer-to-peer lending platforms located in France. If a new platform has been launched since this article was published and you do not see it here, please feel free to submit the platform by using the submit formula.
Alternative Finance in France
For a current view of the European market for peer-to-peer lending and equity crowdfunding, you can visit our data-section for a monthly updated overview of platforms denominated in Euros. However, another valuable source of data to visit for a view on the historical development of alternative finance and crowdfunding in France is the Cambridge Centre for Alternative Finance (CCAF), who published their first report on the European market for alternative finance in 2015. The latest and fourth report was published in 2019 was called “Shifting Paradigms” and looks at 45 European countries (of course including France) and 269 platforms. The report primarily covers the four main types of crowdfunding: lending-based crowdfunding, equity-based crowdfunding, reward-based crowdfunding and donation-based crowdfunding. Because the report uses survey data the latest data available is from 2017.
The total French market for alternative finance in 2017 was €661.3 million up from €444.5 million, which corresponds to a growth rate of 48.8%. In the figure below, you can see the market development in French crowdfunding and alternative finance from 2015-2017. In 2016, the yearly growth rate was 39.8%.
France accounted for 19.6% of the market in continental Europe in 2017. In comparison to the French funding volume €661.3 million, next on the list in the European Union was Germany with a total funding volume of €595.5 million, followed by the Netherlands with €279.9 million. In a worldwide perspective, France is the seventh-largest market for alternative finance.
Statistics About P2P Lending in France
The total alternative finance volume in France in 2017 was split between twelve different business but for our purpose, we will focus on the numbers reported on P2P consumer lending, P2P business lending, and balance sheet business lending, which are the three peer-to-peer lending business models identified by CCAF in the French market. In total, peer-to-peer lending accounted for 62% of the market of which €293 million came from P2P business lending, €87.7 million came from P2P consumer lending for €87.7 million, and €30 million came from balance sheet business lending.
Below, you will find a figure showing how P2P lending has developed in France from 2015-2017.
When it comes to peer-to-peer lending in continental Europe, France had the highest funding volume of all countries with a total funding volume of €410.7 million, closely followed by Germany with a funding volume of €396.7 million. However, again France has a long way to go before catching up with the United Kingdom’s total peer-to-peer funding volume of £4,660 million.
Taxation on Peer-to-Peer Lending in France
Income from P2P lending is categorised as investment income in France and it is possible to deduct losses on crowdfunding operations by individuals not acting in a professional or commercial capacity. For a closer examination of the French tax system, please visit this overview created by the French authorities.
P2P Lending Regulation in France
Since there is still a lack of common rules for crowdfunding in the European Union, regulation of peer-to-peer in France is based on national legislation. However, this might change in the foreseeable future as the European Commission in March 2018 presented a proposal for a regulative framework on crowd and P2P finance as part of their Fintech Action Plan.
France was one of the first countries to introduce the legal status of crowdfunding (financement participative), which was done by modifying the Financial and Monetary code. There are two legal statuses of crowdfunding in France: Crowdfunding intermediary – IFP (Intermédiaire en financement participatif) for lending-based crowdfunding platforms and Crowdfunding advisor – CIP (Conseiller en investissement participatif) for investment-based crowdfunding platforms including mini-bonds.
Below, you will find an overview of some of the most important aspects of the regulatory framework for lending-based crowdfunding in France. These highlights can also be found in the impact assessment accompanying a proposal for a regulative framework on crowd and P2P finance presented by the European Union in March 2018.
- Bespoke Regime: Yes
- Scope of lenders and borrowers: Consumers-to- Businesses; Business-to-business; Consumer-to-consumer (only if loan application for educational project)
- Entry into force: 1 October 2014
- Authorisation: Registration with ORIAS (association in charge of a single register of finance intermediaries). The ORIAS has to check if the platform responds to the legal requirement (knowledge and competence, duty and professional indemnity insurance). Checks are carried out on a declarative basis. Platforms regulated by the ACPR and supervised by the DGCCRF for consumer protection purposes. No ex-ante authorisation required.
- Money handling: Platforms may provide payment services and, when doing so, must follow the specific rules applying to their other status allowing for such a service (credit institution, payment institution, electronic money institution…)
- Minimum capital requirements: None (but have to take professional indemnity insurance).
- Type of loans: Loan cannot exceed 1 M€, with a fixed rate and a maximum duration of 7 years. Only natural persons are allowed to lend on an IFP platform, with a maximal amount of 1,000 € per project.
- Business continuity requirements: IFP must define and organize any arrangements to ensure business continuity, including in the event of the failure of the platform.
- KYC rules (suitability or appropriateness; AML checks): Platforms are also subject to anti-money laundering rules. Neither appropriateness nor suitability test is foreseen.
- Size of loans: €1 million per year per project (duration up to 7 years).
- Maximum investable amounts: Lender can finance up to €2,000 per project if financing is in the form of a loan with interest and up to €5,000 per project for an interest free loan.
- Disclosure to investors by borrower: Disclosure requirements imposed on the platform.
- Information requirements & risk warnings by platforms: Warn the lender about the risks an provide to lenders: with tools to assess the possible loan amount they can afford given their income and expenses; the relevant elements enabling them to assess the economic viability of the project, in particular the business plan.
- Due Diligence: Platforms must perform due diligence in selecting the projects and disclose the pre-determined criteria used in the selection process.
- Conflict of interest: –
- Professional requirements: Good repute and professional qualifications/experience.
At P2PMarketData we are dedicated to providing an unbiased overview of the Peer-to-Peer Lending market and platforms. Among other, in our mission to bring more transparency to the market for online lending we track over 70 platforms funding volumes.
When choosing the best platforms in a country we have considered a variety of factors such as:
- Number of investors
- Minimum investment requirement
- Historical annual returns
- Diversification opportunities
- Reinvestment opportunities
- Educational and informational offerings
- Platform fees
- Total capital invested
- Features (such as secondary market and automatic investing)
- General transparency (the difficulty of finding who the owners are, how they make money on the platform (fees), terms & conditions and more)
- Management team
We also look into the company’s online reputation (for example customer reviews, news, complaints, average monthly searches and social media).