Published: Feb, 2017
A majority of the leading companies operating in the global peer-to-peer (P2P) market are keen on expanding their footprint across small business loan divisions. Strategic alliances will regional companies have therefore become a common practice in the P2P lending market, finds Transparency Market Research (TMR) in a new study. One of such instance was witnessed in the recent past when Prosper Marketplace, Inc., partnered with OnDeck and acquired American Healthcare. With this, both companies joined their hands for improving their product portfolios. Likewise, LendingClub Corporation is looking to acquire promising startups by collaborating with renowned investors in the market.
Besides this, investment towards innovating novel solutions for students has increased. TMR has observed that an increasing number of companies are taking steps towards connecting student borrowers with individual investors thus enabling them acquire loans at low rate of interest. TMR forecasts the global peer-to-peer lending market to expand at a whopping 48.2% CAGR between 2016 and 2024. At this pace, the market’s valuation is expected to rise from US$26.16 bn in 2015 to US$897.85 bn by 2024.
Small Businesses and Asia Pacific to Emerge as Key Gainers in Market
Small business will continue to be the biggest contributor to this growth among other end users. The segment is forecast to exhibit an impressing 48.8% CAGR during the aforementioned forecast period, thus continuing to lead the overall market.
Regionally, North America held lead in the global peer-to-peer market as of 2015. In this year, the region held over 43% of the overall market. However, owing to growth witnessed in countries such as India, China, Japan, and Australia, the P2P market in Asia Pacific is forecast to pace at a higher rate over the course of the forecast period.
Improved Interfaces Making Loan Transactions Easier to Boost Growth
Peer-to-peer lending services follow simplified modes such as improved online interfaces, which augment operations in the market. “The deployment of technological advancements is intended to allow borrowers seek funds online and get instant updates such as funds credited to the bank account or completion of the process,” said a lead TMR analyst. As vendors continue marrying their services to latest technologies, it is going to stoke the demand for P2P lending.
In addition, the market is gaining from the increasing number of student population worldwide seeking simpler yet trustworthy methods of obtaining student loans. The software used at present calculates the viability of loan repayment based on a few factors, which makes the lending and borrowing process even easier. Spurred by these factors, the global peer-to-peer lending market will report strong growth.
Risk of Borrowers Returning to Banks Poses Threat to Market
Despite the positive outlook the possibility of borrowers returning to banks other formal financial institutions continues to be a perpetual risk to the market. The need to counter competition from private lenders has compelled banks and formal lenders to slash their interest rates. Besides this they have introduced several schemes offering high rate of interest on savings couple dampen the P2P market’s growth as well. The direct risk faced by investors in case of defaults on repayment by borrowers also shrink opportunities for the market to an extent.
The study is based on a TMR report, titled “Peer-to-Peer Lending Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2016 - 2024.”
The report segments the global peer-to-peer lending market as:
Global Peer-to-Peer Lending Market Analysis, By End-User, 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 lending market with respect to the following geographical segments along with select country market estimates:
- North America
- The U.S.
- Rest of North America
- The U.K.
- Rest of Europe
- Asia Pacific
- Rest of Asia Pacific
- Rest of the World
- Middle East and Africa (MEA)
- Latin America
Transparency Market Research (TMR) is a market intelligence company, providing global business information reports and services. Our exclusive blend of quantitative forecasting and trends analysis provides forward-looking insight for thousands of decision makers. TMR’s experienced team of analysts, researchers, and consultants, use proprietary data sources and various tools and techniques to gather, and analyze information. Our business offerings represent the latest and the most reliable information indispensable for businesses to sustain a competitive edge.
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