Peer-to-Peer Lending market,is expected to be valued at US$ 2,921.7 Billion by 2027, exhibiting a CAGR of 48.2 % during the forecast period (2019-2027)

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Market Overview

• Peer-to-peer lending or also referred to as the
  P2P lending practice of lending money to
  businesses or individuals with the help of online
  services that match lenders with borrowers. It
  eliminates the financial institution as the
  middleman. P2P lending has allowed investors to
  reciprocate higher returns on their investment by
  balancing the risk. Since P2P lending provides
  easy loans and additional credit to small and
  medium-sized businesses, it has a significant
  contribution to economic growth of many
  countries. Spearheading the peer-to-peer lending
  marketplace are the U.K. and the U.S. which have
  now evolved into mature peer-to-peer lending
  ecosystems. However, countries such as China,
  Australia, Japan, and India are the emerging
  markets for peer-to-peer lending due to
  borrowers lack of credit access.

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• The Global Peer-to-Peer Lending Market, by End
  User (Consumer Credit, Small Business, Student
  Loans and Real Estate), by Business Model
  (Traditional P2P Lending and Marketplace Lending)
   and by Region (North America Europe, Asia
  Pacific, Middle East and Africa and , Latin
  America) - Global Forecast to 2027, is expected
  to be valued at US 2,921.7 Billion by 2027,
  exhibiting a CAGR of 48.2 during the forecast
  period (2019-2027), as highlighted in a report
  published by Coherent Market Insights.

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Market Dynamics- Drivers

• Availability of lower interest rates for
  borrowers is expected to drive growth of the
  global peer-to-peer lending market during the
  forecast period
• Peer-to-peer lending providers have provided
  crucial financing solutions by providing easy
  loans for small and medium businesses at
  reasonable interest rates. According to the
  report published in 2014 by the Federal Reserve
  Bank of Cleveland, peer-to-peer interest rates
  are typically lower than those of credit cards
  for most borrowers. This is combined with a
  superior user-friendly experience for both
  borrowers and investors. Since the market is in
  the nascent stage and has less competition, it is
  expected to attract more customers in the near
  future. Hence, these factors are expected to
  drive the growth of the market during the
  forecast period.

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• Supportive regulatory policies from the
  government of various countries are expected to
  propel the global peer-to-peer lending market
  growth over the forecast period
• The U.K. and European governments are supporting
  peer-to-peer lending platforms by providing a
  suitable and specific framework that supports
  growth of the industry and ensures to protect
  lenders from any potential risk. For instance,
  Financial Conduct Authority, the U.K. regulatory
  body, has developed and implemented regulations
  specific to peer-to-peer lending industry, which
  address the risks and other typical attributes of
  this industry. Moreover, the French Government
  has been strongly supporting peer-to-peer lending
  industry. In fact, it has developed a dedicated
  website for the industry, which has listed names
  of prominent peer-to-peer lending projects. The
  website also provides information regarding
  important activities of the industry and provides
  back-office support. Thus, supportive policies by
  governments are expected to boost the global
  peer-to-peer lending market growth over the
  forecast period.

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• North America region dominated the global
  Peer-to-Peer Lending Market in 2019, accounting
  for 42.4 share in terms of value, followed by
  Asia Pacific, Europe, Latin America and Middle
  East and Africa.

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Market Dynamics- Restraints

• Risks associated with credit and lend are
  expected to hinder the global peer-to-peer
  lending market growth over the forecast period
• In the majority of cases, peer-to-peer lending
  providers do not lend their own money and thus
  the investors are at major risks. This also means
  that investors might lose all their money, in
  case of borrowers default on loan repayments.
  This risk grows gradually with comparatively high
  returns the investor is expected to receive for
  its investment. Moreover, peer-to-peer lending
  providers claim and rate borrowers ability to
  repay the loan and their level of
  creditworthiness on numerous factors. However,
  all such ratings are inconsistent and do not
  provide corresponds to ratings provided by an
  external credit rating agency. Thus, these
  factors are expected to hinder the market growth
  in the near future.

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• The return of lending tendency of banks is
  expected to hamper the global peer-to-peer
  lending market growth during the forecast period
• Generally, banks and mainstream lenders are
  unwilling to lend money to small and medium-sized
  businesses, which has offered a massive
  opportunity for peer-to-peer lenders. However, if
  the tendency for lending in these areas returns
  among banks and other mainstream lenders then it
  would make it challenging for peer-to-peer
  lenders. Furthermore, in the recent past
  conventional saving schemes of all types have
  struggled to provider high interest rates.
  However, return to higher rates on savings could
  restraint peer-to-peer lending providers from
  getting investors attention. Therefore, these
  factors are expected to hinder the global
  peer-to-peer lending market growth during the
  forecast period.

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Market Opportunities

• Upcoming massive opportunities in Asia Pacific
• The marketplace in emerging economies in Asia
  Pacific such as China and India operates in both
  online and offline mode. The recent past has
  witnessed emergence of online peer-to-peer
  lending platforms. According to a report by an
  international philanthropic investment firm
  Omidyar Network, it was observed that in 2014
  more than 400 million people in India borrowed
  money. However, only 1 in 7 people were approved
  for a formal loan. In order to bridge this gap,
  large number of P2P lending companies in India
  are emerging. However, this number is very less
  as compared to number of registered P2P companies
  in China, which are over 2,000

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• Adoption of technology is expected to improve
  lending experience
• Technological development has enabled
  peer-to-peer lending platforms to get familiar
  investors directly with businesses and
  individuals seeking monetary assistance and
  equity financing. Moreover, technology has
  enabled new players to make financing decisions
  and engage with customers more aggressively. It
  has also assisted in providing low cost
  operations as compared to traditional financial
  institutions with large and expensive corporate
  infrastructure.

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• Adoption of technology is expected to improve
  lending experience

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Market Trends

• Emergence of institutional investors
• Entry of institutional investors has allowed the
  market to grow significantly. A large share of
  funding is now provided by institutional
  investors rather than individual investors. For
  instance, in November 2014, Europes peer-to-peer
  global investment fund Eaglewood was launched. It
  is a publicly-traded closed-end fund that
  deployed US 228 Mn primarily across the U.K. and
  the U.S. platforms. Moreover, in January 2014, a
  large investment was made by London based
  alternative asset management firm Arrowgrass
  Capital Partners in the Europe's largest
  peer-to-peer lending service Zopa.

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• Point-of-sale financing
• Payment made through peer-to-peer lending
  platforms at the point of sales for purchases
  done at online sellers and merchants offers a
  significant value. For instance, in order to
  provide easy loans at any e-commerce merchant,
  San Francisco-based Affirm Financial Technologies
  is offering its consumers with virtual cards
  that entitle them to transact online or at
  specific retailers.

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Segment information

• In global Peer-to-Peer Lending Market, by end
  user, small business sub-segment dominated the
  global market in 2019, accounting for 39.03
  share in terms of value, followed by consumer
  credit, student loans and real estate
  respectively.

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Competitive Section

• Key players operating in the global peer-to-peer
  lending market are Daric Inc., Prosper
  Marketplace, Inc., Pave, Inc., CommonBond Inc.,
  Social Finance, Inc., Upstart Network Inc.,
  Social Finance, Inc., Funding Circle Limited,
  Peerform, and CircleBack Lending, Inc.

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Key Developments

• Key players in the market are focused on product
  launches, in order to enhance product portfolio.
  For instance, in March 2016, Prosper Marketplace
  launched its first mobile app by the name of
  Prosper Daily.
• Major companies in the market are involved in
  partnerships and collaborations, in order to gain
  a competitive edge in the market. For instance,
  in January 2016, CommonBond partnered with
  Macquarie Capital, Barclays, and started
  providing loans to its student borrowers.

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