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Global Peer-to-Peer Lending Market: Increasing Aversion to Conventional Financing Models Drives Market, says TMR

Posted on May 08, 2017

Leading players in the global market for peer-to-peer lending, including LendingClub Corporation, Prosper Marketplace, Inc., Funding Circle Limited, and Common Bond Inc., are focusing on offering new and innovative products and raising funds so as to support competitive pricing, observes Transparency Market Research (TMR) in a recent report. Instances would be the April 2014 acquisition of Springstone Financial by LendingClub Corporation. The US$140 mn acquisition allowed LendingClub to expand its product line in the patient and education finance loans segments. Acquisition of American Healthcare Lending allowed Prosper Marketplace to extend its reach to the healthcare and small business loan segments.

In the next few years, companies are expected to target startups, small businesses, and student borrowers. Raising funds from investors to be able to provide loans at competitive pricing will also be a popular trend in the global peer-to-peer lending market.Transparency Market Research estimates that the global peer-to-peer lending market will exhibit an exponential 48.2% CAGR from 2016 to 2024, rising from a valuation of US$26.16 bn in 2015 to US$897.85 bn by 2024.

peer-to-peer-lending-market

Declining Consumer Interest in Conventional Financing to help North America Retain Dominance

Of the key end-users contributing to the huge demand for peer-to-peer loans examined in the report, the segment of small businesses is expected to account for a massive share in the overall market and expand at a whopping 48.8% CAGR over the report’s forecast period. The segment also holds the dominant position in the present market.

From a geographical standpoint, the North America market is presently the leading contributor of revenue to the global peer-to-peer lending market, accounting for an impressive 43% in the global market in 2015. Factors such as a rising interest in innovative lending models, declining consumer loyalty towards conventional banking institutions, and the rising dependency on online banking functions will continue to drive the market for peer-to-peer lending market in North America over the report’s forecast period. Over the report’s forecast period, the North America peer-to-peer lending market is expected to expand at a 47.2% CAGR, very much retaining its dominance in the global market.

Rising Loan Volumes in Emerging Economies to Emerge as Key Driving Force of Global Peer-to-Peer Lending Market

The vast population base of emerging economies such as India and China are significantly adding to the growth opportunities of the global P2P lending market. TMR analysts state that of the nearly 400 mn borrowers in India in 2014, only one in seven resorted to formal loan options. Owing to the surprising and promising statistic, P2P lending has the opportunity of extending its reach to these countries and strengthening its foothold by bridging the gap between P2P lending companies and the vast inaccessibility to credit options. The P2P lending market could also benefit from the rising numbers of small- and medium-sized enterprises (SMEs) in these developing economies.

The likelihood of borrowers resorting to conventional financing options from banks and other unauthorized or formal lenders is one of the key challenges of the global peer-to-peer lending market. To outpace competitors in the fiercely competitive market, banks and traditional lenders are improving their interest rates. Schemes offering higher rates of interest on savings could further restrain the growth prospects of the global peer-to-peer lending market in the near future.

This review of the global peer-to-peer lending market is based on a recent market research report published by Transparency Market Research, titled “Peer-to-Peer Lending Market (End-user - Consumer Credit, Student Loans, Small Business, and Real Estate; Business Model - Traditional P2P Model and Marketplace Lending Model) - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2016 - 2024.”

For the study, the global peer-to-peer market has been segmented as follows:

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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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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