Siena is a medieval city in Tuscany, whose historic centre is a UNESCO World Heritage Site. Siena is also home to Monte dei Paschi. Founded in 1472, the oldest bank in the world has nurtured an exclusive relationship with Il Palio which is based not only on its philanthropic mission but also on a creditor-debtor link.
Unfortunately, one of the reasons why Monte dei Paschi was rescued by the Italian Government is the huge amount of bad loans owned by some most prominent Italian entrepreneurs. Also for this, Monte dei Paschi’s story has been seen by many as a sign of the decline of the country.
However, something new is happening and this comes from the alternative finance sector. Let’s consider, for example, the equity crowdfunding segment. The Italian government, through the Stability Law for 2017, extended access to equity crowdfunding to all kind of SMEs in a move which has been considered to be one of the most innovative and game changing in the European Union. One of its main elements is the strategic aim of funnelling capital into the real economy offering fiscal relieves to investors.
This potential is confirmed also by the fact that the sector is still in its infancy and the margins to grow are massive. Indeed, compared to the global industry, Italian share of market counts just for 0.14 percent as capital raised over 2016 equalled 7.7 million euros against 5.4 billion euros on a global scale while analysts forecast a capacity of 67 million euros to be reached in the next future getting to a kind of tenfold increased market share worth 1.2 percent.
As a consequence of this, in Italy there are only 7,000 startups while the most entrepreneurial city in the United Kingdom outside London, Birmingham, counted 17,743 new businesses registered during 2016.
Nonetheless the number of new ventures created can grow thanks to equity crowdfunding. Since the introduction of web based capital raises, it has proved to be more effective than the traditional channels like venture capital with 57 percent of campaigns reached their funding target with an average of 277.419 euros of capital raised. From the investor perspective, one needs to also consider that traditional investments, nowadays, are not as remunerative as they were in the past.
On the flip side, though, significant effort has to be put in to get people more aware of these new investment possibilities. In practical terms, this would mean transforming the potential of the market into reality. In fact, despite the innovation brought into the system by new regulations, other requirements and rules remain unchanged, which continue to act as obstacles for market to flourish.
Nevertheless, what has been done until now confirms the interest of the decision maker along with the other players in the scene to support a sector which could trigger a new renaissance for the country as the wealth of nations is still made by entrepreneurs.
Read the whole article on Crowd Valley (a Grow VC Group company) News.
Est. 2009 Grow VC Group is the global leader of fintech innovations, digital and distributed finance services. Our mission is to make the finance services more effective, transparent and democratic. The Group includes leading fintech companies in their own areas.
Research Report 1/2017: Machines, Asia And Fintech:
Rise of Globalization and
Protectionism as a
Fintech Hybrid Finance Whitepaper
Fintech And Digital Finance Insight & Vision Whitepaper
Learn More About Our Companies: