The minibond market in Italy continues to represent a solid alternative for financing companies of all sizes. Despite the reduction in issues observed in recent years due to high interest rates, 2024 saw signs of recovery thanks to a partial lowering of rates by the ECB and the need for companies to diversify their sources of funding.
Below we list some trends to watch out for in 2025.
1. Emerging sectors: the green wave and sustainability
The future of minibonds is closely linked to the ecological transition. EU taxonomy and SFDR regulations are incentivising companies to issue debt instruments linked to sustainable projects. According to analysis by Cerved Rating Agency, in 2024 more than 35% of new issues were associated with 'green' or circular economy projects. This trend will continue thanks to climate funds and tax incentives for companies that demonstrate a positive impact on the environment such as the Green New Deal fund, the Green Transition Incentives (MIMIT) and the Transition 5.0 Plan.
Opportunities:
- Renewable energies: Companies in solar, wind and geothermal energy are using minibonds to finance new plants.
- Circular economy: Sectors such as recycling and waste reduction are growing, with potential to attract ESG investors.
2. Geographical concentration and expansion possibilities
To date, Lombardy, Veneto, Emilia-Romagna, Lazio and Piedmont account for 70% of total minibond issues. This geographical concentration reflects the presence of a solid entrepreneurial fabric and the role of local banks in facilitating access to capital markets.
Opportunities:
- Digitisation: new digital platforms are making it easier for companies in peripheral regions to access minibonds and alternative finance instruments in general.
- Local development: Regional and European funds are incentivising SMEs to explore alternative financing instruments. As part of the 2021-2027 European programming period, Italy runs 38 Regional Programmes co-financed by the European Regional Development Fund (ERDF) and the European Social Fund Plus (ESF+). These funds aim to support projects in areas such as innovation, digitisation and energy efficiency, helping SMEs to diversify their sources of funding
3. Hybrid financing and innovation
The integration of minibonds with other forms of alternative finance is gaining ground. The most interesting instruments include:
- Equity crowdfunding: The combination of debt and equity allows companies to strengthen their balance sheets and raise the necessary capital without diluting company ownership too much.
- Tokenisation of minibonds: The use of blockchain to create digital minibonds makes the distribution and liquidity of these instruments easier. Some Italian fintechs are experimenting with tokenization of minibonds for specific projects, such as financing local infrastructure or innovative startups. This approach could attract a new generation of retail investors.
Investor opportunities and industry challenges
With the increasing regulation and standardisation of minibonds, these instruments are gaining in attractiveness for both institutional and retail investors. The once underdeveloped secondary market is evolving rapidly, thanks to digitisation and the creation of dedicated platforms for minibond trading. This improves liquidity, reduces investors' perceived risk and makes it easier for SMEs to access these instruments. This development is particularly important to attract retail investors, who are often discouraged by the lack of liquidity of minibonds compared to other securities.
However, the sector faces significant challenges. It is essential that issuing companies maintain a solid creditworthiness to ensure investor confidence. SMEs also have to adapt to evolving European regulations, which require greater transparency on the environmental and social impact of financed projects. Finally, minibonds compete with other forms of short-term debt, such as bank loans or corporate bonds, which may offer more favourable terms, especially in an environment of high interest rates.
These dynamics make the minibond market a sector in transformation, with growth opportunities linked to sustainability and innovation, but with the need to overcome structural obstacles to consolidate itself as an alternative financing option. 2025 promises to be a crucial year for consolidating the role of minibonds as a key instrument in Italian alternative finance. The combination of innovation, sustainability and increased market access could turn this asset class into one of the most dynamic for years to come.