Why Europe’s Debt-Focused Fintechs Could Be Heading For A Crash

Are hundreds of European fintech start-ups heading for a dramatic blow-up? New research suggests they could be, with the authors claiming there is a significant risk of systemic contagion following such a crash.

Fintechs across Europe had by this year raised more than $12 billion to lend to small and medium-sized enterprises (SMEs) and consumers, points out credit fund WinYield, with venture capital investors providing equity and institutional investors such as insurers supplying funding for loans. However, warns WinYield, many of these fintechs have little or no practical experience of investing through different credit cycles – and it claims their supposedly sophisticated new technology may not be up to the job.