Alternative finance refers to financial channels, processes, and instruments that have emerged outside of the traditional finance system, such as regulated banks and capital markets.[1] Examples of alternative financing activities through 'online marketplaces' are reward-based crowdfunding, equity crowdfunding, revenue-based financing, online lenders, peer-to-peer consumer and business lending, and invoice trading third party payment platforms.[2]
Alternative finance instruments include cryptocurrencies such as Bitcoin, SME mini-bond, social impact bond, community shares, private placement and other 'shadow banking' mechanisms. Alternative finance differs to traditional banking or capital market finance through technology-enabled 'disintermediation',[3] which means utilising third party capital by connecting fundraisers directly with funders, in turn, reducing transactional costs and improve market efficiency.[4]
- ^ "Cambridge Judge Business School: Cambridge Centre for Alternative Finance". Jbs.cam.ac.uk. Retrieved 2015-07-24.
- ^ "The Rise of Future Finance" (PDF). Nesta.org.uk. Archived from the original (PDF) on 2015-02-26. Retrieved 2015-07-24.
- ^ "Crowdfunding: Disintermediated Investment Banking by Brian J. Rubinton :: SSRN" (PDF). Papers.ssrn.com. doi:10.2139/ssrn.1807204. S2CID 53662264. SSRN 1807204.
{{cite journal}}: Cite journal requires|journal=(help) - ^ "The Future of Financial Services" (PDF). Weforum.org. Retrieved 2015-07-24.