INVESTMENT RISKS IN THE GLOBAL ALTERNATIVE FINANCE MARKET
Abstract
The active development of the world market for alternative finance has led to a discourse on investment risks associated with the specifics of this type of investment. The study showed that P2P lending and crowdinvesting can provide good opportunities for portfolio investments, but there are a number of specific financial, operational and strategic risks. The paper states that pear-topear lending plays a key role in the global market of alternative finance. It is determined that crowdinvesting provides mainly financing for start-ups and young companies, and in this regard is very vulnerable to the risk of bankruptcy and non-payment of dividends. In addition, it has been found that all alternative finance models have particular risks associated with information asymmetry and information cascades, due to the specifics of the functioning of social networks. Since craftfunding is highly risky, portfolio diversification in this case is far more important than a more secure investment in the traditional capital market.
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