Alternative Investment Instruments in the Republic of Moldova: Opportunities and Risks

Abstract

In the context of global financial market volatility, investors seek alternatives to diversify their portfolios. Alternative investment instruments, such as venture capital, crowdfunding, and P2P lending, are gaining traction in Moldova, offering economic opportunities as well as legislative and operational challenges. This study analyzes these instruments in the Moldovan market, assessing the regulatory framework, risks, and benefits. Moldova’s financial sector is dominated by banks, and the alternative investment market is still in its early stages. While some local investment funds exist, the legal framework remains underdeveloped. Venture capital is limited, with foreign investors playing a dominant role, whereas crowdfunding and P2P lending, exemplified by the success of the Fagura platform, are on the rise. Opportunities include diversifying financing sources for SMEs, fostering innovation, and attracting international investors. However, risks related to regulation, liquidity, and financial literacy remain significant. Recommendations include developing an adequate regulatory framework, strengthening financial supervision, promoting financial education, and integrating into international networks. Implementing these measures could accelerate the development of alternative investment instruments, contributing to Moldova’s economic growth. CZU: 330.322:005.915(478); JEL: G23, G24, G28