Despite the financial sector expanding by almost 50% since pre-financial crisis, total bank assets in Europe have decreased in absolute terms.

The principal driver has been the imposition of more onerous capital requirements that have seen minimum levels increase by 75% for certain banks since 2011. (Basel III Monitoring Report, March 2018)

Other factors that have reduced the lending appetite of banks include more prudent accounting rules (most recently the amendment to IFRS 9) and the increasing costs of compliance & cumbersome traditional credit underwriting due to a lack of positive credit bureau records in Europe).

Alternative non-bank credit institutions are ideally placed to fill this void.