Alternative lenders: opportunity or threat?

Author: | Published: 23 Apr 2015

Banks have much to gain from the new breed of lenders gaining prominence across Europe. But they must learn to work with their new competition

Given the continued political and regulatory pressure on European banks to deleverage their balance sheets, it is no surprise that they have been shrinking their loan books, particularly in respect of longer-term liabilities. It means, however, that the ability of European banks to advance new loans at competitive rates is unlikely to improve in the near future.

The consequent gap in the market created by the retrenchment of traditional banks is now being filled by a variety of alternative credit providers. Deloitte's alternative lender deal tracker shows impressive growth in the mid-market with alternative lenders' deal flow estimated to have increased across Europe by 43% in financial year 14.

However, does the rise of alternative lenders mean that traditional banks will continue to retrench from...