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The credit intermediation market size is forecast to increase by USD 649.87 billion at a CAGR of 2.36% between 2023 and 2028. The market is witnessing substantial growth, driven by the prioritization of effective financialization. This trend is bolstered by the broadening of financial institutions' capabilities to provide last-mile services and the increasing availability of banking channels. The rapid expansion of the market can be attributed to various factors, including a focus on streamlined financialization, the proliferation of non-banking financial institutions, and government initiatives aimed at facilitating fund allocation to end-users. Banks, credit unions, and other financial institutions are key players in the credit intermediation market.
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The credit intermediation market encompasses a broad spectrum of financial activities, serving as a vital link between banks, lending institutions, and borrowers. These intermediaries provide an array of financial services such as loans, credit, and mortgages to both commercial and consumer clients. They manage risk and ensure liquidity while adhering to regulations and monitoring interest rates. The credit intermediation market plays a crucial role in allocating funds from savers to borrowers, promoting economic growth. Additionally, they facilitate investments and manage assets and liabilities to maintain financial stability. Through commercial and retail channels, credit intermediaries play a crucial role in supporting economic growth by efficiently allocating capital and enabling access to credit for individuals and businesses alike. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic market research and growth analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Growing focus on effective financialization is notably driving market growth and forecasting. Effective financialization is being facilitated by the growth of financial institutions' capabilities to provide last-mile reach along with the availability of banking services over multiple channels. Moreover, the market growth and trends of non-bank intermediary and their efforts to increase financial inclusion and liberalize credit have also driven the growth of the market.
Moreover, new developments such as door-step banking and banking correspondents have further increased the demand. Thus, a growing focus on effective finalization is likely to drive the market growth analysis during the forecast period.
The development of an active secondary credit sector ensuring smooth credit intermediation is an emerging market trend. There is a growing focus on addressing the twin challenges of ensuring smooth credit flow and its intermediation. For instance, to ensure smooth credit flow, the Reserve Bank of India inaugurated a Secondary Loan Market Association in 2020. Moreover, the credit intermediaries transfer credit at a fair price based on a devised market-based auction mechanism in which quotas from all members are obtained instead of selling the credit loan through a bilateral arrangement.
As a result, the platform enables a deep and active secondary credit sector and provides fairness to transparency of credit and credit risk among participants. Such developments are expected to increase the use and will positively impact the growth of the global market during the market analysis and report forecast period.
Growing vulnerabilities and deficiencies in banks related to credit intermediaries is a significant challenge hindering market growth. The non-bank financial intermediary (NBFI) sector is growing, and it continues to gain importance in providing services. This results in both direct and indirect interconnections between banks and NBFIs through multiple channels. However, the risk is about the growth of exposures, given the often opaque and quickly evolving nature of the attendant risks, including the NBFI distress, such as the collapse of Archegos Capital Management and events leading to stresses in government bond markets have highlighted vulnerabilities and deficiencies in banks risk management practices.
Furthermore, complex instruments in areas of derivatives and securities financing, leveraged lending and brokerage, and liquidity risks with concentration, and illiquidity, also cause exposure to banks. There is also an increasing risk of cryptoasset-related services being provided by NBFIs. Thus, growing vulnerabilities and deficiencies in banks related to credit intermediaries are expected to restrict the growth of the global market during the forecast period.
The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Bank of America Corp. - The company offers credit intermediation services such as personal loans, and mortgage lending.
The market research report also includes detailed analyses of the competitive landscape of the market and information about 10 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The individual segment is estimated to witness significant growth during the forecast period. Factors such as an increase in the adoption of credit intermediaries for personalized agreements and a growing focus on becoming credit counselors are expected to drive the growth of the individual segment of the market in focus during the forecast period. There is an increase in the number of people seeking credit counseling amid a challenging economy owing to increases in interest rates and inflationary factors to manage debt.
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The individual was the largest segment and was valued at USD 2,711.54 billion in 2018. Further, according to the US Bureau of Labor Statistics, employment growth for credit counselors between 2021 and 2031 is expected to be 9.3%, with an estimated 3,300 job openings. There has been an increase in spending credit via loans. For instance, as per RBI data, Indians spent more than USD 10 billion online via credit cards in June 2023. Thus, increasing debt counseling and a growing focus on credit intermediaries for personalized agreements, along with increasing credit counselors, are expected to drive the growth of the individual segment of the market in focus during the forecast period.
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APAC is estimated to contribute 35% to the growth of the global market during the market forecast period. Technavio’s analysts have elaborately explained the regional market trends and analysis along with drivers that shape the market during the forecast period. Regional market growth is mainly driven by the presence of prominent vendors. This makes North America a hub for credit intermediation. Adding to this, the market in North America is influenced by the growing popularity of credit lending in the region. The number of small and medium enterprises (SMEs) has grown significantly in North America. For instance, according to the US Commerce Chambers, more than 30 million SMEs were present in the US in 2023. SMEs generally opt for credit lending with low credibility for the growth of their business. Therefore, a growing number of SMEs in this region are boosting the growth of the market in North America.
In addition, the rising number of students in countries such as the US and Canada is also increasing the demand for microcredit with low credibility as an alternative to traditional forms of education financing. This is fueling the growth of the market in North America. Moreover, in the US, most immigrants and entrepreneurs from the minority community are turning toward credit, which boosts the growth of the market in the region. Such factors are expected to drive the regional market growth during the forecast period.
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The market report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2023 for the following segments
The market is witnessing significant growth, driven by the surge in demand for credit services and the adoption of credit intermediaries by both legal individuals and entities. Credit intermediaries play a crucial role in facilitating the granting of credit agreements between consumers and financial institutions, including commercial banks and credit unions. Their advisory services offer ease and convenience in the credit agreement process, contributing to a market scenario analysis and impact analysis.
Additionally, the market plays a crucial role in facilitating the flow of funds between various entities, such as financial intermediaries, wholesale and retail institutions, and borrowers. These intermediaries accept deposits from individuals and businesses and channel them into credit markets, enabling access to funds for various purposes such as granting credit and investments ,assets and liabilities. Through the adoption of financial intermediation, there is a notable rise in investments and lower generation of operating costs for entities. Moreover, credit intermediaries serve as middlemen in the lending process, providing a practical and convenient solution for borrowers while protecting investors and ensuring the stability of financial markets.
The market is experiencing increased adoption, particularly in developing countries undergoing rapid industrialization. Despite challenges such as the lack of transparency and potential frauds, there is a notable opportunity for growth, driven by rising investments from governments and banking institutions. Lower operating costs and infrastructure development are contributing to the market's expansion, although business challenges like maintenance and workforce management persist. The market addresses the financial status of consumers, safeguarding investors from fraud enterprises and mishandling of agreements. This practical and convenient solution has become increasingly important, particularly in regions with stringent money security regulations. As the market continues to evolve, the role of credit intermediaries in protecting both investors and consumers remains crucial in fostering a trustworthy and efficient credit ecosystem.
Market Scope |
|
Report Coverage |
Details |
Page number |
152 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 2.36% |
Market Growth 2024-2028 |
USD 649.87 billion |
Market structure |
Concentrated |
YoY growth 2023-2024(%) |
2.22 |
Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
Performing market contribution |
APAC at 35% |
Key countries |
US, China, Japan, India, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Bank of America Corp., Barclays PLC, Citigroup Inc., Credit Suisse Group AG, Deutsche Bank AG, HSBC Holdings Plc, JPMorgan Chase and Co., Morgan Stanley, The Goldman Sachs Group Inc., and Wells Fargo and Co. |
Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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