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The micro lending market share is expected to increase to USD 209.13 million from 2021 to 2026, at a CAGR of 16.89%.
This micro lending market research report provides valuable insights on the post COVID-19 impact on the market, which will help companies evaluate their business approaches. Furthermore, this report extensively covers micro lending market segmentation by source (Banks, NBFCs, and MFIs) and geography (APAC, Europe, North America, Middle East and Africa, and South America). The micro lending market report also offers information on several market vendors, including Accion International, Bajaj Finserv Ltd., Bandhan Bank Ltd., Bluevine Inc., Equitas Small Finance Bank Ltd., ESAF Small Finance Bank, Fincare Small Finance Bank Ltd., Fusion Micro Finance Ltd., HDB Financial Services Ltd., ICICI Bank Ltd., Kiva Microfunds, Larsen and Toubro Ltd., Lendio Inc., Lendr.Online LLC, Oakam Ltd., On Deck Capital Inc., Panamax Inc., Small Industries Development Bank of India, and Ujjivan Small Finance Bank Ltd. among others.
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The adoption of advanced technology in microfinancing is notably driving the micro lending market growth, although factors such as lack of awareness about financial services may impede the market growth. Our research analysts have studied the historical data and deduced the key market drivers and the COVID-19 pandemic impact on the micro lending industry. The holistic analysis of the drivers will help in deducing end goals and refining marketing strategies to gain a competitive edge.
Key Micro Lending Market Driver
The adoption of advanced technology in micro financing is one of the key drivers propelling the micro lending market growth. Some prominent players are bringing new technologies to increase their market share and provide customers with a better experience, such as flexibility to repay loans through their mobile phones and avoiding the risks of cash-in-transit. On the other hand, the increasing availability of mobile phones for accessing financial services via mobile credit and e-wallets is boosting the micro lending market growth, particularly in places where banks are underrepresented. Moreover, loans may be quickly repaid using digital technology, minimizing cash-related hazards, which is causing a rise in digitization across the global micro lending market and is expected to fuel the market growth during the forecast period.
Key Micro Lending Market Trend
The rise in the adoption of micro lending in developing nations is one of the key micro lending market trends fueling the market growth. Fundamentally, emerging countries are now able to reduce poverty and improve their standard of living due to the increase in the number of microlenders. Given this, various farmers in the African countries are adopting micro lending for buying crops, which drives the global micro lending market growth. In addition, people in rural areas are availing of loans from microlenders for setting up their own businesses and raising their standard of living. Such benefits will fuel the market growth during the forecast period.
Key Micro Lending Market Challenge
Lack of awareness about financial services is one of the key factors challenging the micro lending market growth. MFIs are majorly beneficial for low-income groups. However, they face major challenges due to the lack of awareness among the population about financial services. Most MFI customers do not have sufficient knowledge of how micro lending works and many of them do not even understand the loan process. On the other hand, many MFI representatives at the field service level do not know the rules and regulations, such as pricing regulations. As a result, lack of awareness is becoming a key challenge in micro lending operations, which will negatively impact the global micro lending market growth during the forecast period.
This micro lending market analysis report also provides detailed information on other upcoming trends and challenges that will have a far-reaching effect on the market growth. The actionable insights on the trends and challenges will help companies evaluate and develop growth strategies for 2022-2026.
Technavio categorizes the global micro lending market as a part of the global specialized consumer services market. Our research report has extensively covered external factors influencing the parent market growth potential in the coming years, which will determine the levels of growth of the micro lending market during the forecast period.
The report analyzes the market's competitive landscape and offers information on several market vendors, including:
This statistical study of the micro lending market encompasses successful business strategies deployed by the key vendors. The micro lending market is fragmented and the vendors are deploying growth strategies such as brand and reliability to compete in the market.
To make the most of the opportunities and recover from post COVID-19 impact, market vendors should focus more on the growth prospects in the fast-growing segments, while maintaining their positions in the slow-growing segments.
The micro lending market forecast report offers in-depth insights into key vendor profiles. The profiles include information on the production, sustainability, and prospects of the leading companies.
Our report provides extensive information on the value chain analysis for the micro lending market, which vendors can leverage to gain a competitive advantage during the forecast period. The end-to-end understanding of the value chain is essential in profit margin optimization and evaluation of business strategies. The data available in our value chain analysis segment can help vendors drive costs and enhance customer services during the forecast period.
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47% of the market's growth will originate from APAC during the forecast period. China, India, and South Korea are the key markets for the micro lending market in APAC. Market growth in this region will be slower than the growth of the market in South America.
The rising adoption of online platforms for lending will facilitate the micro lending market growth in APAC over the forecast period. This market research report entails detailed information on the competitive intelligence, marketing gaps, and regional opportunities in store for vendors, which will assist in creating efficient business plans.
COVID Impact and Recovery Analysis
The increased prevalence of COVID-19 adversely impacted the growth of the market in the region in 2020. However, the rising utilization of digital platforms for financial transactions and large-scale COVID-19 vaccination drives by various countries in the region at the beginning of 2021 improved the regional business scenario, which led to the increasing demand for micro lending. Such increasing demand will drive the market growth during the forecast period.
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The micro lending market share growth by the banks segment will be significant during the forecast period. Micro lending banks offer significant benefits to the low-income groups, which is expected to increase the demand for micro lending during the forecast period. Moreover, the need to provide easy credit and offer small loans to customers without any collateral further increases the preference for micro lending banks among people, which, in turn, fuels the growth of the market in focus, and the same trend is expected in the coming years.
This report provides an accurate prediction of the contribution of all the segments to the growth of the micro lending market size and actionable market insights on post COVID-19 impact on each segment.
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Micro Lending Market Scope |
|
Report Coverage |
Details |
Page number |
120 |
Base year |
2021 |
Forecast period |
2022-2026 |
Growth momentum & CAGR |
Decelerate at a CAGR of 16.89% |
Market growth 2022-2026 |
$ 209.13 million |
Market structure |
Fragmented |
YoY growth (%) |
18.52 |
Regional analysis |
APAC, Europe, North America, Middle East and Africa, and South America |
Performing market contribution |
APAC at 47% |
Key consumer countries |
US, China, India, South Korea, and Germany |
Competitive landscape |
Leading companies, Competitive strategies, Consumer engagement scope |
Key companies profiled |
Accion International, Bajaj Finserv Ltd., Bandhan Bank Ltd., Bluevine Inc., Equitas Small Finance Bank Ltd., ESAF Small Finance Bank, Fincare Small Finance Bank Ltd., Fusion Micro Finance Ltd., HDB Financial Services Ltd., ICICI Bank Ltd., Kiva Microfunds, Larsen and Toubro Ltd., Lendio Inc., Lendr.Online LLC, Oakam Ltd., On Deck Capital Inc., Panamax Inc., Small Industries Development Bank of India, and Ujjivan Small Finance Bank Ltd. |
Market dynamics |
Parent market analysis, 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 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. |
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