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  "documentTitle": "Creating the best SME Debt finance ecosystem",
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  "notes": "Focuses on the AFP segment of SME financing.",
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      "text": "Alternative Finance Providers (AFPs) are growing fast, but are struggling to achieve new competitive funding and are generally costly for SMEs.",
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      "text": "c) AFP loans: Alternative Finance Providers (AFPs) are growing fast, but are struggling to achieve new competitive funding and are generally costly for SMEs. Today, AFPs are a key part of the SME financing ecosystem. Due to more constrained bank financing, micro/small SMEs are increasingly turning to alternative lenders. The AFP market share for new micro/small loans has increased significantly the last years, reaching 45% of new micro SME loan volume and 16% of new small SME loan volume in 2022. AFPs generally can finance more easily SMEs rejected by banks, thanks to their higher risk appetite, reduced regulatory constraints, lower regulatory cost, innovative risk-models and fast decision processes. However, AFPs also generally charge higher prices to offset higher risk and require a fee for “middle man” intermediation between the SME and the Fund / Investor providing the loan (AFP interest rates are 1-4% points higher than banks; factoring and short-term credit can be even 3-6x higher though are typically shorter term); on top of this, AFPs charge one-off success-fees of 2-4% and yearly service fees of 0.75-1%). AFPs are also less regulated (mainly through the Code of Conduct, but penetration is still low), and there are concerns about SME protection (high and opaque prices, and limited standards on Duty of Care, affordability, default process and cost). Many AFPs indicate that they struggle to scale due to lack of funding. Institutional investors are still reluctant to step in (as risk-adjusted returns are low, the asset class is still new and has limited track-record, and ticket sizes are small for Pension funds). Lack of funding could slow down financing to micro/small SMEs through AFPs.",
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      "text": "1. Onderzoek non-bancaire financiering, Stichting MKB Financiering, 2022; 2. Expert interviews, Oliver Wyman analysis;",
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      "text": "Challenges faced by Dutch SMEs and comparison with other jurisdictions",
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