Crowdfunders generally fall into different categories like equity, donation, reward and debt. The last one is also known as microfinancing or what is commonly referred to in Europe as “peer-to-peer lending.” Funding is generally in the form of a simple loan, but over time, other instruments may possibly evolve from this. Here are the top 15 up-and-coming peer-to-peer lenders that are making the financial waves in Europe. This is an update to a previous top 10 list published on Forbes last March 26th.

1. Zopa This London-based P2P lender offers loans of up to £10,000 where individual borrowers deal directly with lenders. Zopa categorizes borrowers based on their credit grades and lenders can offer terms and amount of money based on the category of the borrower.

2. Funding Circle A marketplace where lenders can spread their investments across various small businesses to lower the risk and increase their ROI. The U.K. government is now lending through Funding Circle and will be lending £20 million to SMEs through the platform. Small businesses can seek loans ranging from £5,000 to £1 million from multiple crowdfunders.

3. Ratesetter Also London-based, Ratesetter is the first to have introduced the concept of a “provision fund” into P2P lending. This fund is generated from borrowers’ payment of a “credit rate” fee and is used to diversify risk in the form of a reimbursement to lenders in the event of a late payment or payment default.

The lenders mentioned above are the biggest P2P lenders by total volume in Europe. These three are also the founding members the P2P Finance Association, the first trade association for the P2P finance industry.

4. Auxmoney Based in Dusseldorf, Germany, this peer-to-peer loan marketplace raised $12 million in funding just this March. It allows private consumers to get personal loans from private investors between €1,000 and €20,000. Over 11,000 projects, collectively valued at over €50 million, have been financed through this platform.

5. ThinCats As of April 2013, this P2P lender which operates throughout the U.K. had £23.14 million total capital deposited from 1,581 lending members, and had provided 120 loans since January 2011 totalling £20.38 million. Average interest earned by lenders is 10.84% net.

6. Pret d’Union Based in Moulineaux in northern France, this top P2P lender allows private individuals and institutional investors to lend money to borrowers directly through a secured bond marketplace. It has received $5.22 million in Series B funding in 2011, and then $4.18 million in series C funding in 2012. Both lender and borrower gets a better deal from bypassing the traditional financial institutions.

7. Folk2Folk This is another U.K.-based P2P lender that offers interest-only loans that are secured by first mortgages on non-residential or for-commercial-use properties located in the South West (Cornwall and West Devon). U.K. interest rate is normally at 7.5% for both borrowers and lenders and the minimum lending amount is £25,000.

8. Smartika Based in Milan and formerly known as Zopa Italy, Smartika has been providing credit to the people since 2007. Lenders and borrowers get better rates that can be up to 25% less than what they would get if borrowing through traditional banking. This means that the lenders enjoy 6.5% p.a. interest rate after charges.

9. isePankur This is the first lender to allow cross-border lending (open to investors from all EU countries) and are pursuing a pan-European (Central and Eastern Europe) coverage in future. In March this year, the lender launched a Secondary Market facility where P2P loans are now tradable. This is the first social lending platform in Estonia and is also the oldest peer-to-peer lending platform in Scandinavia.

10. Assetz Capital Launched towards the end of 2012, this platform has lent £2,234,995 at an average rate of 13.3%. Their largest loan is £1.5m and they claim this is the largest peer-to- peer loan in the UK to date. So far they have 809 registrations.

11. Boober Originated in the Netherlands, Boober is a direct P2P lending marketplace where the interaction between borrower and lenders is more personal and social. To date it has funded €791,650 in loans with interest rates ranging from 5.50% to 16.00%.

12. FriendsClear – Based in Paris, France, FriendsClear offers two services: FriendsClear Family for securing loans between well-known friends and relatives; and FriendsClear Pro for entrepreneurs to seek funding from private investors whom they don’t know personally. It received $637,000 funding in 2010.

13. FundingKnight This U.K.-based peer-to-peer crowdfunding platform allows borrowers and lenders to transact directly and eliminates the need for a banking system and other financial agencies. FundingKnight has a membership minimum of £500 and can lend up to £100,000 to small businesses planning to expand. FundingKnight is a member of the fraud prevention agency CIFAS.

14. Prestiamoci The first home-grown crowdfunder in Italy, it was founded in 2007 and launched its site on 2009. What makes Prestiamoci unique, setting it apart from its competitors, is that they have built their own in-house P2P technology platform.

15. Squirrl A social saving community based in the U.K. that provides person-to-person as well as person-to-business lending. Squirrl provides a platform for funding assets that are provided by well established suppliers to their customers and the services are paid for over a period of time. This is allowed in many situations such as in the motor industry, industrial machinery, office equipment, mobile-phones, and vending machines.

"P2P Lending is booming in the UK and growing in several national markets in Europe," says Claus Lehmann, a peer-to-peer lending expert and Editor at P2P-Banking.com. Going forward, "a next step in development could be a pan-european P2P lending service – to achieve that companies have to deal with regulation and financial practises that differ widely from market to market," adds Mr. Lehmann.

Industry-wise, a recent crowdfunding report estimates that crowdfunding sites globally is estimated to reach close to $5.1 billion in transactions for 2013, twice the $2.7 billion total for 2012. And while the U.S. currently leads the world in volume of crowdfunding transactions at 72%, still a sizable chunk will come from Europe at 26%, and then 2% from the rest of the world.

By David Drake, founder and chairman of LDJ Capital, a New York City private-equity firm, and of The Soho Loft, a global financial media company with 3 divisions in Publishing, Conferences & Expos and Consulting. For more updates on the crowdfunding industry and information on alternative investment events, or if  you have comments about this article, you can comment here or reach out to me at [email protected] directly.