Crowdfunding / crowdinvesting / crowdlending
FinTechs belonging to this category operate crowdfunding, crowdinvesting and crowdlending platforms on which money is raised to invest in various projects, mainly start-up companies and real estate projects.
Crowdfunding is not a defined financial service, but generally used to describe donation-based crowdfunding (the investor donates the money to the project), reward-based crowdfunding (the investor receives an often symbolic consideration for his investment), equity-based crowdfunding (crowdinvesting: the investor participates in the profits of the financed project or acquires shares or debt instruments) or lending-based crowdfunding (crowdlending: the investor is reimbursed at the end of the project with or without interest).
Attitude of the country towards crowdfunding, crowdinvesting and crowdlending platforms
According to the study “Estudio Fintech 2020 Ecosistema Argentino” prepared jointly by the Cámara Argentina de Fintech and International Development Bank, the crowdfunding/crowdinvesting/crowdlending segment represents only 6% of the universe of Argentine FinTech companies. Within a total number of 268 FinTech companies only 11 of them are dedicated to crowfunding/crowdinvesting/crowdlending activities.
Obligations and requirements to provide crowdfunding, crowdinvesting and crowdlending platforms described above
Crowdfunding and crowdinvesting activities have been expressly regulated in Argentina through Law 27,349 (“Ley de Apoyo al Capital Emprendedor”) enacted in 2017. Law 27,349 requires crowdfunding platforms to register before the CNV as “Plataformas de Financiamiento Colectivo” and comply with the information and surveillance regime set forth in Resolution 717/2017 dictated by CNV.
Additional comments regarding the legal situation for crowdfunding, crowdinvesting and crowdlending platforms or what FinTech’s must be aware of in this business area
Although Law 27,349 regulates both crowdfunding and crowdinvesting activities, the crowdlending activity has been intentionally excluded from regulation by Law 27,349. This represents a problem for crowdlending companies which are exposed to the risks of carrying out their activities lacking a clear legal framework applicable to their business. The absence of regulation in the crowdlending segment discourages this activity to continue growing and exposes the already existing companies to legal proceedings that could be initiated by the CNV as regards to potential sanctions for irregular offering of securities or financial intermediation without the corresponding authorisation from CNV.
Market size for crowdfunding, crowdinvesting and crowdlending platforms and biggest companies in this business area
In Argentina, the Crowdfunding segment is small within FinTech sector as it only represents 6% of the total number of FinTech companies. The most known FinTechs within the crowdfunding and crowdinvesting segment are Crowdium, SeSocio.com and Andes Crowd. With regard to the crowdlending segment, the most known FinTech companies are Afluenta, Leasing Club, and Paysur.
Additional comments regarding the economic situation for crowdfunding, crowdinvesting and crowdlending platforms or what FinTech’s must be aware of in this business area
As previously mentioned, in Argentina crowdfunding platforms do not represent a strong segment in the FinTech sector. Additionally, the 11 crowdfunding companies existing at the time were created between 2012 and 2016, suggesting that this segment has been struggling with some difficulties to grow over the last five (5) to six (6) years.