Global Peer-to-Peer Lending Market: Overview

Of late, the landscape of money lending has witnessed many changes and has been evolving continuously. As several companies incorporate advanced technologies to offer seamless and highly efficient solutions, the money lending scenario is improved. Rapid advancement in technologies regulating the processes related to money lending is likely to encourage the growth of the global peer-to-peer lending market in the years to come. In addition, as the processes are cost-effective, many users are opting for peer-to-peer money lending solutions as compared to other solutions of money lending. In addition to that, a rise in the number of students from all over the glove is availing peer-to-peer money lending solutions, which is helping the market grow at a rapid pace.

Peer-to-peer (P2P) lending services help a person to get a loan from another person directly. It eliminates the need for the involvement of financial institutions in the process. Websites, in this case, facilitate the entire process of money lending and this has resulted in the increased adoption of these services through these websites.

peer-to-peer-lending-market

P2P lending is also known as crowdlending or social lending. The concept of P2P lending is relatively new and has existed since 2005. There exist several companies in this sector, such as StreetShares, Upstart, Peerform, Lending Club, and Prosper. P2P lending websites establish a direct connection between the investors and the borrowers. The website lays out the terms and rates enabling the transaction. Most of the websites offer an extensive range of interest rates depending on the creditworthiness of the loan applicant.

The global peer-to-peer lending market is estimated to register a phenomenal growth, expanding at an outstanding growth rate of 48.2% CAGR from 2016 to 2024, and reach a worth of US$ 897.85 billion through 2024.

Driven by Capital Insufficiency, Small Business Make Rapid Strides along the Growth Trajectory 

Based on three different parameters, the global peer-to-peer lending market is primarily divided based on the business model, end-user, and region. Under the category of end-user, the market is divided into real estate, student loans, small businesses, and consumer credit. In the business model category, marketplace lending model and the traditional P2P model are the two major segments in the market.

The small business segment is estimated to account for a sizeable share of the global peer-to-peer lending market contributing toward a significant amount of the market revenue. Reason for such dominance of the small businesses sector is mainly due to the insufficiency of capital that most of the small businesses are faced with. As such, the segment is important when it comes to market revenue. According to the analysts of the Transparency Market Research (TMR), the small business segment is likely to expand at a whopping 48.8% CAGR over the tenure of assessment.

Borrowers Turning Attention to Banks could Pose a Threat to Market

However, on the other hand, the growth of the global peer-to-peer lending market could be restricted by the competitive interest rates that prevail in the market. Attractive interest rates offered by other professional lenders, including banks in the global peer-to-peer lending market. There lies an immense pressure on the existing lenders and banks to better interest rate due to the ongoing battle of obtaining a larger share of the market. As a consequence, the market is also likely to suffer from the rising number of schemes that offer a high rate of interest on savings. In addition, the increasing number of loan defaulters is likely to emerge as another restraining factor for the global peer-to-peer lending market in the years to come. 

Diminishing Rate of Interest in Banks Open New Avenues in North America 

The global peer-to-peer lending market is regionally segmented into the key areas of North America, South America, Europe, Asia Pacific, and the Middle East and Africa.

It is estimated that North America would hold a dominant position in the global peer-to-peer lending market. Diminished rate of interest in the existing banks together with the increased dependence on online activities is likely to propel North America at the forefront of market growth. Apart from North America Europe and the Asia Pacific is also catching up due to the attractive rate of interest and ease of doing business online.

This report aims to provide a detailed and vital analysis of the global peer-to-peer market along with revenue and growth forecasts for the period from 2014 to 2024. The global financial crisis, subsequently resulted in the emergence of the peer-to-peer lending outside of the traditional financial system especially in countries such as the U.S., the U.K. and Europe. Typically, the peer-to-peer lending business provides a unique and transparent platform to individuals, small businesses, and start-ups to invest or borrow money in few clicks

The report offers an in-depth study of the market drivers, restraints, and growth opportunities. Using these factors, the report identifies various trends expected to impact the market during the forecast period from 2016 to 2024. It includes a comprehensive coverage of the underlying economic, environmental, and technological factors influencing the peer-to-peer market. It provides the competitive landscape and analysis of key players in the global peer-to-peer market in order to highlight the state of competition and to identify the various business strategies adopted by them. In this report, the global peer-to-peer lending market is segmented on the basis of end-users and business models and geographies and explains the penetration of each market segment within various geographies, and how these segments have accelerated the growth of the market as a whole.

The end-users segment of the peer-to-peer lending market is classified into consumer credit, small business, student loans, and real estate and the business models segment is classified into traditional P2P model and marketplace lending model. Geographically, the global market for peer-to-peer lending has been segmented into five regions: North America, Europe, Asia Pacific, and Rest of the World (Middle East and Africa and Latin America). The market size and forecast for each region has been provided for the period from 2014 to 2024 along with the CAGR (%) for the forecast period from 2016 to 2024. The study also includes qualitative analysis of the competitive scenario for major countries/regions in these geographical segments.

The report includes an overview of the market strategies, annual revenues, and the recent developments of key companies operating in the market. The key market participants profiled in this study include LendingClub Corporation, Prosper Marketplace, Inc., CommonBond Inc., Upstart Network Inc., Funding Circle Limited, CircleBack Lending, Inc., Peerform, Social Finance Inc., Pave, Inc., and Daric Inc.

Market Segmentation:

Global Peer-to-Peer Lending Market Analysis, By End-Users, 2014 – 2024 (US$ Bn)

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

Global Peer-to-Peer Lending Market Analysis, By Business Model, 2014 – 2024 (US$ Bn)

  • Traditional P2P Model
  • Marketplace Lending Model

In addition, the report provides cross-sectional analysis of the peer-to-peer market with respect to the following geographical segments along with select country market estimates:

  • North America
    • The U.S.
    • Rest of North America
  • Europe
    • The U.K.
    • France
    • Germany
    • Rest of Europe
  • Asia-Pacific
    • China
    • Australia
    • Rest of Asia Pacific
  • Rest of the World
    • Middle East and Africa (MEA)
    • Latin America

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Peer To Peer Lending Market

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