Global outlook of the peer-to-peer lending market

Technavio’s market research analysts have predicted that the global peer-to-peer lending market will grow tremendously during the forecast period and will post an impressive CAGR of more than 53% by 2020. In the recent years, the financial institutions have constantly been trying to deleverage the off-balance sheet items to meet the penal capital adequacy requirements. As a result, there has been a massive reduction of loan finance for small and medium-sized businesses (SMEs) and individual borrowers as they are considered to be risky. SMEs have a disadvantage when dealing with a capital market regarding credit rationing and finance gaps. Finance gaps are the difference in the working capital and the cash flow of the companies and have driven the need for an alternative source of financing. This will lead to the increasing demand for peer-to-peer loans, especially from the micro, small, and medium enterprises (MSMEs).

Peer-to-peer lending with government support would help investors to make small investments in private companies. The European Commission has already started evaluating soft-law measures to promote peer-to-peer lending and crowdfunding across Europe. Peer-to-peer lending practices are gaining traction in several countries across the globe especially in the developed countries such as the UK and the US, as regulators in these regions support peer-to-peer lending platforms to get money transfer licenses. In addition to increasing the growth opportunities of different customers, peer-to-peer or p2p lending also helps companies reduce costs and claims.

Competitive landscape and key vendors

The market is characterized by the presence of several major and small vendors and will also witness the entry of several new vendors. These new vendors or start-up companies with their innovative products will attract more users, investors, and media coverage and will post a stiff competition to the existing vendors. The competitive environment in the market is expected to intensify during the forecast period and will be mainly attributed to the rise in the use of smartphones for entering into the online space. International players will also grow inorganically by following mergers and acquisitions activities. To retain their market shares, peer to peer lending companies have the need to develop innovative technologies and also stay up-to-date with emerging technologies that could influence their product lines.

The leading vendors in the market are -

• CircleBack Lending
• Lending Club
• Peerform
• Prosper
• Upstart

The other prominent vendors in the market are Borrowers First, Daric, Funding Circle, Pave, and SoFi.

Geographical segmentation and analysis of the peer-to-peer lending market

• Americas
• APAC
• EMEA

This market study estimates that in terms of geography, the Americas will dominate the p2p lending industry throughout the forecast period and will also account for more than 45% of the total shares of the market by 2020. The US government has established trans-pacific and trans-Atlantic trade agreements that have led the incumbent banks to quickly acquire and integrate new market entrants. However, filling the funding gap data in banking is critical to understand the impact, size, and leverage of the large-scale funding activity across the financial system and this will increase the demand for peer-to-peer business lending in this region during the forecast period. Additionally, the multi-service banking techniques followed by the Latin American countries to increase the scope of financing for MSMEs will also drive the growth of the market.

Key questions answered in the report include

• What will the market size and the growth rate be in 2020?
• What are the key factors driving the global peer-to-peer lending market?
• What are the key market trends impacting the growth of the global peer-to-peer lending market?
• What are the challenges to market growth?
• Who are the key vendors in the global peer-to-peer lending market?
• What are the market opportunities and threats faced by the vendors in the global peer-to-peer lending market?
• Trending factors influencing the market shares of the Americas, APAC, and EMEA.
• What are the key outcomes of the five forces analysis of the global peer-to-peer lending market?

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