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) - PowerPoint PPT Presentation

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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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Title: 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)

Coherent market insightsMarket Research and
Business Consulting Services

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.

  • 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.

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.

  • 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.

  • 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.

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.

  • 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.

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

  • 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

  • Adoption of technology is expected to improve
    lending experience

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.

  • 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.

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

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.

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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