The global peer-to-peer lending market was valued at USD 110 billion in 2022 and grew at a CAGR of 25% from 2023 to 2032. The market is expected to reach USD 1024.45 billion by 2032. The increasing number of P2P lending platforms will drive the growth of the global peer-to-peer lending market.
Peer-to-peer lending is a financial service that enables individuals to lend or borrow money from one another without going through a bank. P2P lending websites allow investors and borrowers to communicate directly. The website facilitates transactions and establishes the conditions and pricing. An online application is submitted by a prospective borrower who wants to use the peer-to-peer lending network. The platform evaluates the application and establishes the applicant's credit score and risk level. After that, the right interest rate is assigned to the application. Interested investors can choose the applicant they would like to fund. Unlike other lending platforms or investment options, peer-to-peer lending increases profits for investors. Other benefits include reduced interest rates, more lending prospects, enhanced control and transparency. There is a decrease in default risk, convenience, and accessibility. There is also a greater diversity of financial systems. Peer-to-peer lending opens up more options or avenues. It offers an easily accessible funding source for startups or budding entrepreneurs who find it difficult to acquire funding through traditional channels. Peer-to-peer lending can be a cost-effective financing solution as it offers flexibility about loan quantity and repayment alternatives. It offers a customized experience for investors and lenders according to their ability, needs and other requirements. Putting money into peer-to-peer lending can reduce risk and diversify investors' holdings.
Get an overview of this study by requesting a free sample
The rising awareness about peer-to-peer lending – the lack of financing options through conventional money systems like banks has encouraged borrowers, investors and other stakeholders to look for other avenues to facilitate lending and borrowing outside these conventional systems. The need for a simplified, transparent, easy, quick, safe and reliable lending system outside of commercial banks has increased the popularity of peer-to-peer lending platforms. Central banks, commercial banks, government institutions, regulatory bodies, fintech platforms and other relevant parties are collaborating to improve the peer-to-peer lending market's ecosystem. Therefore, the rising awareness about peer-to-peer lending will propel the market's growth.
The high-interest rates of borrowing – peer-to-peer lending is more accessible than banks, given the reduced need for proper documentation or procedures for acquiring capital. Thereby, it often involves more risk on the part of the investors as these investments or lending prospects are not volatile, riskier and more vulnerable to failure. Most borrowers turn to peer-to-peer lending after trying traditional routes such as banking, which means there is added risk to lending to these borrowers, which is transferred to investors in the P2P market. Therefore, investors charge a higher interest rate on borrowing, given the increased risk of lending or defaulting on the part of borrowers.
Growing political will and regulatory approval to streamline peer-to-peer lending – the increasing number of micro, small and medium enterprises are driving major developing economies and contributing to the GDP growth and overall national development of countries. However, these small businesses often find it difficult to find funding through proper channels like commercial banks. Therefore, government institutions are contributing towards building a favourable lending ecosystem that could facilitate MSMEs to acquire capital from interested and willing investors without going through banks and their procedures. Therefore, favourable government regulation will propel the market's growth during the forecast period.
The regions analyzed for the market include North America, Europe, South America, Asia Pacific, the Middle East, and Africa. Asia Pacific emerged as the most significant global peer-to-peer lending market, with a 44% market revenue share in 2022.
The thriving MSMEs in developing nations of Asia Pacific will drive the regional market's growth. Given the expanding consumer demand, low labour workforce, and other business prospects, increasing investment opportunities in the region will propel the market. Favourable government regulation and the growing number of P2P lending platforms will augment the market's growth.
Asia Pacific Region Peer-to-Peer Lending Market Share in 2022 - 44%
www.thebrainyinsights.com
Check the geographical analysis of this market by requesting a free sample
The business model segment is divided into traditional marketplace lending and alternate marketplace lending. The traditional marketplace lending segment dominated the market, with a share of around 67% in 2022. It is called traditional marketplace lending when a potential borrower applies for a loan through a marketplace lending company's website or other proper channels/means. There is a borrower, investor and a platform for them to connect. The applications are evaluated, ranked, and given an interest rate based on the platform providers or the company's in-house credit scoring system. Proper channels improve the borrowers' and investors' transparency, authenticity, verification and credibility.
The product type segment is divided into personal loans and business loans. The business loan segment dominated the market, with a share of around 55% in 2022. A loan meant exclusively for company use is known as a business loan. Investors are interested in making money through their investments and, therefore, are more likely to offer capital or money to potential business ideas, startups, or entrepreneurs rather than personal loans. Additionally, borrowers seeking personal loans prefer traditional methods such as money through banks, family or friends. The lack of awareness about peer-to-peer lending for personal loans or less known features of personal loans in the P2P market translates to the dominance of the business loan segment.
The loan type segment is divided into consumer credit loans, student loans, small business loans, real estate loans and others. The small business loans segment dominated the market, with a market share of around 45% in 2022. The number of small businesses is increasing globally. However, most businesses do not have previous financial account statements to gather more funding through proper channels like bank loans. Therefore, they rely on P2P lending, which offers an accessible, open, and simplified means to acquire capital. It also allows interested investors to access diversified opportunities in a customized manner, offering a greater chance of making profits.
Report Description:
Attribute | Description |
---|---|
Market Size | Revenue (USD Billion) |
Market size value in 2022 | USD 110 Billion |
Market size value in 2032 | USD 1024.45 Billion |
CAGR (2023 to 2032) | 25% |
Historical data | 2019-2021 |
Base Year | 2022 |
Forecast | 2023-2032 |
Region | The regions analyzed for the market are Asia Pacific, Europe, South America, North America, and Middle East and Africa. Furthermore, the regions are further analyzed at the country level. |
Segments | Business Model, Product Type and Loan Type |
As per The Brainy Insights, the size of the global peer-to-peer lending market was valued at USD 110 billion in 2022 to USD 1024.45 billion by 2032.
Global peer-to-peer lending market is growing at a CAGR of 25% during the forecast period 2023-2032.
The market's growth will be influenced by the rising awareness about peer-to-peer lending.
The high interest rates of borrowing could hamper the market growth.
This study forecasts revenue at global, regional, and country levels from 2019 to 2032. The Brainy Insights has segmented the global peer-to-peer lending market based on below mentioned segments:
Global Peer-to-Peer Lending Market by Business Model:
Global Peer-to-Peer Lending Market by Product Type:
Global Peer-to-Peer Lending Market by Loan Type:
Global Peer-to-Peer Lending Market by Region:
Research has its special purpose to undertake marketing efficiently. In this competitive scenario, businesses need information across all industry verticals; the information about customer wants, market demand, competition, industry trends, distribution channels etc. This information needs to be updated regularly because businesses operate in a dynamic environment. Our organization, The Brainy Insights incorporates scientific and systematic research procedures in order to get proper market insights and industry analysis for overall business success. The analysis consists of studying the market from a miniscule level wherein we implement statistical tools which helps us in examining the data with accuracy and precision.
Our research reports feature both; quantitative and qualitative aspects for any market. Qualitative information for any market research process are fundamental because they reveal the customer needs and wants, usage and consumption for any product/service related to a specific industry. This in turn aids the marketers/investors in knowing certain perceptions of the customers. Qualitative research can enlighten about the different product concepts and designs along with unique service offering that in turn, helps define marketing problems and generate opportunities. On the other hand, quantitative research engages with the data collection process through interviews, e-mail interactions, surveys and pilot studies. Quantitative aspects for the market research are useful to validate the hypotheses generated during qualitative research method, explore empirical patterns in the data with the help of statistical tools, and finally make the market estimations.
The Brainy Insights offers comprehensive research and analysis, based on a wide assortment of factual insights gained through interviews with CXOs and global experts and secondary data from reliable sources. Our analysts and industry specialist assume vital roles in building up statistical tools and analysis models, which are used to analyse the data and arrive at accurate insights with exceedingly informative research discoveries. The data provided by our organization have proven precious to a diverse range of companies, facilitating them to address issues such as determining which products/services are the most appealing, whether or not customers use the product in the manner anticipated, the purchasing intentions of the market and many others.
Our research methodology encompasses an idyllic combination of primary and secondary initiatives. Key phases involved in this process are listed below:
The phase involves the gathering and collecting of market data and its related information with the help of different sources & research procedures.
The data procurement stage involves in data gathering and collecting through various data sources.
This stage involves in extensive research. These data sources includes:
Purchased Database: Purchased databases play a crucial role in estimating the market sizes irrespective of the domain. Our purchased database includes:
Primary Research: The Brainy Insights interacts with leading companies and experts of the concerned domain to develop the analyst team’s market understanding and expertise. It improves and substantiates every single data presented in the market reports. Primary research mainly involves in telephonic interviews, E-mail interactions and face-to-face interviews with the raw material providers, manufacturers/producers, distributors, & independent consultants. The interviews that we conduct provides valuable data on market size and industry growth trends prevailing in the market. Our organization also conducts surveys with the various industry experts in order to gain overall insights of the industry/market. For instance, in healthcare industry we conduct surveys with the pharmacists, doctors, surgeons and nurses in order to gain insights and key information of a medical product/device/equipment which the customers are going to usage. Surveys are conducted in the form of questionnaire designed by our own analyst team. Surveys plays an important role in primary research because surveys helps us to identify the key target audiences of the market. Additionally, surveys helps to identify the key target audience engaged with the market. Our survey team conducts the survey by targeting the key audience, thus gaining insights from them. Based on the perspectives of the customers, this information is utilized to formulate market strategies. Moreover, market surveys helps us to understand the current competitive situation of the industry. To be precise, our survey process typically involve with the 360 analysis of the market. This analytical process begins by identifying the prospective customers for a product or service related to the market/industry to obtain data on how a product/service could fit into customers’ lives.
Secondary Research: The secondary data sources includes information published by the on-profit organizations such as World bank, WHO, company fillings, investor presentations, annual reports, national government documents, statistical databases, blogs, articles, white papers and others. From the annual report, we analyse a company’s revenue to understand the key segment and market share of that organization in a particular region. We analyse the company websites and adopt the product mapping technique which is important for deriving the segment revenue. In the product mapping method, we select and categorize the products offered by the companies catering to domain specific market, deduce the product revenue for each of the companies so as to get overall estimation of the market size. We also source data and analyses trends based on information received from supply side and demand side intermediaries in the value chain. The supply side denotes the data gathered from supplier, distributor, wholesaler and the demand side illustrates the data gathered from the end customers for respective market domain.
The supply side for a domain specific market is analysed by:
The demand side for the market is estimated through:
In-house Library: Apart from these third-party sources, we have our in-house library of qualitative and quantitative information. Our in-house database includes market data for various industry and domains. These data are updated on regular basis as per the changing market scenario. Our library includes, historic databases, internal audit reports and archives.
Sometimes there are instances where there is no metadata or raw data available for any domain specific market. For those cases, we use our expertise to forecast and estimate the market size in order to generate comprehensive data sets. Our analyst team adopt a robust research technique in order to produce the estimates:
Data Synthesis: This stage involves the analysis & mapping of all the information obtained from the previous step. It also involves in scrutinizing the data for any discrepancy observed while data gathering related to the market. The data is collected with consideration to the heterogeneity of sources. Robust scientific techniques are in place for synthesizing disparate data sets and provide the essential contextual information that can orient market strategies. The Brainy Insights has extensive experience in data synthesis where the data passes through various stages:
Market Deduction & Formulation: The final stage comprises of assigning data points at appropriate market spaces so as to deduce feasible conclusions. Analyst perspective & subject matter expert based holistic form of market sizing coupled with industry analysis also plays a crucial role in this stage.
This stage involves in finalization of the market size and numbers that we have collected from data integration step. With data interpolation, it is made sure that there is no gap in the market data. Successful trend analysis is done by our analysts using extrapolation techniques, which provide the best possible forecasts for the market.
Data Validation & Market Feedback: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helps us finalize data-points to be used for final calculations.
The Brainy Insights interacts with leading companies and experts of the concerned domain to develop the analyst team’s market understanding and expertise. It improves and substantiates every single data presented in the market reports. The data validation interview and discussion panels are typically composed of the most experienced industry members. The participants include, however, are not limited to:
Moreover, we always validate our data and findings through primary respondents from all the major regions we are working on.
Free Customization
Fortune 500 Clients
Free Yearly Update On Purchase Of Multi/Corporate License
Companies Served Till Date