The global peer-to-peer lending market is witnessing a fierce competition among players, reports Transparency Market Research (TMR). The topmost players in the market are scattered globally and adopting various strategies to achieve the permanent position. Moreover, these players are mainly following the trend to build several tactical alliances for stretching their presence in medium and small business loan divisions.
A few popular companies’ names in the global peer-to-peer lending market include Prosper Marketplace Inc., LendingClub Corporation., and OnDeck. In the recent past, Prosper Marketplace had been merged with OnDeck to improve their revenue index. Such joint ventures are the most popular strategies to adopt to sustain the competition in the global peer-to-peer lending market. However, companies in the market are also refurbishing their product portfolio to gain more prominence. For instance, Prosper Marketplace has purchased American Healthcare in order to improve its product. Additionally, LendingClub Corporation, another giant company in the global peer-to-peer lending market is collaborating with reliable investors to open various startups. However, all of these companies are aiming to offer innovative solutions for student demographic.
According to the experts of TMR, the growth of the global peer-to-peer lending market is anticipated to occur at a stellar 48.2% CAGR during the forecast tenure 2016-2024. They further predicts that the market will be worth of US$897.85 bn by 2024-end.
In terms of end-users, the small businesses segment showcases a lion’s share of the overall peer-to-peer lending market’s revenue. This is because of the fact that small businesses do not hold sufficient capital, thus, such insufficiency makes them apply for peer-to-peer money lending services. Geographically, North America is expected to trump over other regions in the global peer-to-peer lending market, thanks to rapid spread of digital platforms.
Simpler Methods Used in Peer-to-peer Lending Bolsters Demand in Market
Peer-to-peer lending is also known as marketplace lending. Peer-to-peer or P2P lending is basically an alternate way of lending money virtually. The marketplace lending platform’s core functioning is connecting borrowers/consumers with lenders/investors, majorly via online medium. The global peer-to-peer lending market is majorly fueled by growth in emerging markets, due to the increasing knowledge of marketplace lending, lower interest rates to consumers, and greater investment transparency. However, several banking and financial institutions are targeting to deleverage market loss risk through divulging in alternative lending methods such as P2P lending. This factor has led to the rapid reduction of loan for small-sized business as well as individual borrowers. This advantage provides a major impetus to the growth of the global peer-to-peer lending market.
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Furthermore, numerous alternative small business lending platforms utilize digital tools and machines for providing credit facility to a wide array of small businesses efficiently and quickly, mainly those who are rejected by banks. Such factors are also propelling expansion in the global peer-to-peer lending market. Along with this, rapid technological advancements and soaring demand for simplified modes such as online interfaces during money lending are also contributing demand in the global peer-to-peer lending market.
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Borrowers’ interests in other lenders such as banks could obstruct the growth of global peer-to-peer lending market. Many conventional banks are trying to improve their interest rates to attract more borrowers. As a result, the future of the global peer-to-peer lending market could be hampered due to the sudden rise of several schemes which offer high interest rates. Nonetheless, colossal population base in Asia Pacific region provides strong growth opportunities to the global peer-to-peer lending market players. This factor is believed to underpin the growth momentum of the market in the coming years.
The review is based on a market research report by TMR, titled, “Peer-to-Peer Lending Market – Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2016 – 2024”.