French crowdfunding association, Financement Participatif France (FPF), has provided an update on debt-based crowdfunding platforms in the country. FPF has introduced a new requirement for member platforms to post performance statistics on their websites starting from this year. This move aims to promote transparency and allow investors to easily compare different online investment platforms. FPF has also made changes to the way they record delays on payments of longer than six months. Now, a delay is recorded on the first day past the set date, even if there is an extension agreement. FPF acknowledges that this may result in an increase in delays for the industry, but they believe it is necessary for accurate reporting.
FPF emphasized that a delay in a project does not necessarily mean a default. They noted that it is common for real estate projects to experience delays due to various factors. FPF stated, “Crowdfunding platforms strive to satisfy both individuals by offering them the opportunity to invest in the real economy, and businesses requesting financing, which they support in their growth but also in times of difficulty.”
Looking ahead, FPF expects delays to “increase significantly” in the next two years, particularly in the real estate sector, which represents 70% of crowdfunding fundraising in 2022. FPF describes the real estate market as facing challenges, including cash flow tension and declining construction costs. However, despite these difficulties, real estate crowdfunding continues to offer attractive returns to investors, with a net cost of risk return of around 9% over the past five years.
Mathilde Iclanzan, the vice president of FPF and director of WiSEED, a crowdfunding platform, commented on the situation. She stated that the changes implemented by FPF are necessary to provide accurate data to investors and to ensure that crowdfunding platforms continue to support both individuals and businesses during challenging times.
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