Peer-to-Peer Lending Market to Reach USD 1024.45 Billion by 2032; Thriving MSMEs in Developing Nations to Propel Growth: The Brainy Insights

The global peer-to-peer lending market size is anticipated to grow from USD 110 billion to USD 1024.45 billion in 10 years, a CAGR of 25%. The market will experience rapid growth due to the favourable government regulations for the peer-to-peer lending industry during the forecast period.

Newark, Dec. 19, 2023 (GLOBE NEWSWIRE) — The Brainy Insights estimates that the USD 110 billion in 2022 global peer-to-peer lending market will reach USD 1024.45 billion in 2032. A financial service known as peer-to-peer lending allows people to lend or borrow money from one another without going via a bank. P2P lending platforms facilitate direct communication between investors and borrowers. Unlike other lending platforms or investment possibilities, peer-to-peer lending boosts investor returns. Further advantages include reduced interest rates, greater financing opportunities, improved control, and increased transparency. Convenience, accessibility, and default risk are all reduced. The variety of financial systems is also higher. Peer-to-peer lending provides readily available capital and expands the possibilities available to startups and aspiring business owners who struggle to secure funding through conventional channels. Peer-to-peer lending is sometimes an affordable source of capital.

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Key Insight of the Global Peer-to-peer Lending Market

Asia Pacific will dominate the market during the forecast period.

The growth of the regional market will be propelled by the prosperous MSMEs in Asia Pacific’s growing countries. The market will be driven by the growing investment opportunities in the area due to the low labour costs, rising consumer demand, and other commercial opportunities. Beneficial government regulations and the increasing number of P2P lending platforms available will also aid the market’s expansion.

In 2022, the traditional marketplace lending segment dominated the market with the largest market share of 67% and market revenue of 73.70 billion.

The business model segment is divided into traditional marketplace lending and alternate marketplace lending. In 2022, the traditional marketplace lending segment dominated the market with the largest market share of 67% and market revenue of 73.70 billion.

In 2022, the business loan segment dominated the market with the largest market share of 55% and market revenue of 60.50 billion.

The product type segment is divided into personal loans and business loans. In 2022, the business loan segment dominated the market with the largest market share of 55% and market revenue of 60.50 billion.

In 2022, the small business loans segment dominated the market with the largest market share of 45% and market revenue of 49.50 billion.

The loan type segment is divided into consumer credit loans, student loans, small business loans, real estate loans and others. In 2022, the small business loans segment dominated the market with the largest market share of 45% and market revenue of 49.50 billion.

Advancement in market

Swedish fintech SaveLend purchased the peer-to-peer (P2P) lending division of app-based bank Lunar to provide the company with the necessary focus. Lunar stated that a peer-to-peer lending specialist would be a better fit for its consumers than a bank because peer-to-peer lending requires a substantial investment. Lunar was founded in 2015 and has its headquarters in Denmark. It also has operations in Sweden and Norway. It provides banking, payments, and investing products for individuals and small businesses and offers a bank account through a mobile app.

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Market Dynamics

Driver: The increasing awareness about P2P lending platforms.

A growing number of borrowers, investors, and other stakeholders are searching for alternative channels that can enable lending and borrowing outside of these traditional systems due to the increased knowledge of peer-to-peer lending and the dearth of financing possibilities through conventional money systems like banks. Peer-to-peer lending services have become more popular due to the demand for a more streamlined, transparent, easy, rapid, safe, and dependable lending system outside commercial banks. To strengthen the ecosystem of the peer-to-peer lending industry, central banks, commercial banks, government agencies, regulatory authorities, fintech companies, and other pertinent parties are working together. As a result, the market will grow as more people become aware of peer-to-peer lending.

Restraints: P2P lending has higher interest rates.

Due to the lower requirement for formal documents or procedures for collecting funds, peer-to-peer lending is more accessible than banks despite having higher interest rates. As a result, investors typically bear a greater risk because these lending opportunities or investments are less erratic, riskier, and more prone to failure. Since most borrowers explore traditional loan channels like banks before turning to peer-to-peer lending, lending to these borrowers carries additional risk, which is borne by investors in the P2P market. As a result, given the increased risk of lending or borrower default, investors demand higher interest rates on borrowing.

Opportunities: favourable regulatory environment.

Growing numbers of micro, small, and medium-sized businesses are driving increased regulatory permission and political desire to simplify peer-to-peer lending. The number of micro, small, and medium-sized businesses (MSMEs) is rising, propelling significant developing economies and adding to GDP growth and the general national development of nations. This trend is accompanied by growing political will and regulatory clearance to facilitate peer-to-peer lending. Nevertheless, it might be challenging for these tiny companies to obtain capital through the right channels, such as commercial banks. Government organizations are helping to create a conducive lending ecosystem To enable MSMEs to obtain financing from eager and motivated investors without going through banks and their procedures. Consequently, during the projection period, advantageous government regulations will fuel the market’s expansion.

Challenges: Lack of insurance or protection for investors.

Since investors directly invest in the businesses, they do not have insurance coverage or government protection in case of default by the borrower. Since small businesses are more vulnerable to global shocks or economic meltdowns, investors risk of losing their money is also high. Therefore, investors may be averse to P2P lending or increased scrutiny of applicants, which may challenge the market’s growth.

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Some of the major players operating in the global peer-to-peer lending market are:

• Funding Circle Limited
• Harmoney Australia Pty Ltd
• Kabbage Inc.
• Lending Loop
• LendingTree, LLC
• Linked Finance
• Prosper Funding LLC
• SocietyOne
• Upstart Network, Inc.

Key Segments covered in the market:

By Business Model

• Traditional Marketplace Lending
• Alternate Marketplace Lending

By Product Type

• Personal Loan
• Business Loan

By Loan Type

• Consumer Credit Loans
• Student Loans
• Small Business Loans
• Real Estate Loans
• Others

By Region

• North America (U.S., Canada, Mexico)
• Europe (Germany, France, the UK, Italy, Spain, Rest of Europe)
• Asia-Pacific (China, Japan, India, Rest of APAC)
• South America (Brazil and the Rest of South America)
• The Middle East and Africa (UAE, South Africa, Rest of MEA)

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About the report:

The market is analyzed based on value (USD Billion). All the segments have been analyzed on a worldwide, regional, and country basis. The study includes the analysis of more than 30 countries for each part. The report analyses driving factors, opportunities, restraints, and challenges to gain critical market insight. The study includes Porter’s five forces model, attractiveness analysis, Product analysis, supply and demand analysis, competitor position grid analysis, distribution, and marketing channels analysis.

About The Brainy Insights:

The Brainy Insights is a market research company, aimed at providing actionable insights through data analytics to companies to improve their business acumen. We have a robust forecasting and estimation model to meet the clients’ objectives of high-quality output within a short span of time. We provide both customized (clients’ specific) and syndicate reports. Our repository of syndicate reports is diverse across all the categories and sub-categories across domains. Our customized solutions are tailored to meet the clients’ requirement whether they are looking to expand or planning to launch a new product in the global market.

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