Growing demand for peer-to-peer lending solutions for student loans, real estate, consumer credit, and small businesses is projected to augment the peer-to-peer lending market. The valuation of this market is expected to reach USD 517.2 billion in 2024.
Increasing awareness about the benefits of P2P lending and reduced operating costs are projected to propel market growth over the next decade. By 2034, the market is projected to reach USD 1,709.6 billion, expanding at a CAGR of 12.70%.
| Attributes | Key Insights |
|---|---|
| Peer-to-peer Lending Market Size (2024E) | USD 517.2 billion |
| Market Valuation (2034F) | USD 1,709.6 billion |
| Value-based CAGR (2024 to 2034) | 12.70% |
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| Leading Business Model | Traditional |
|---|---|
| Value Share (2024) | 53.80% |
The traditional model for peer-to-peer lending is expected to gain a market share of 53.80% in 2024. The key advantage of using traditional peer-to-peer lending is competitive interest rates offered for investors to balance the risk of investors.
Further, peer-to-peer lending firms made it easy for borrowers to obtain finance and get loans funded quickly. This model also provides a flexible approach to borrowers, thus increasing its attractiveness among users.
| Leading End User | Consumer Credit |
|---|---|
| Value Share (2024) | 28.40% |
The consumer credit segment is projected to accumulate a 28.40% share in the year 2024. The segment is expanding at a healthy pace and is anticipated to gain numerous remunerative opportunities in upcoming years. The key factor that is influencing the segment’s growth is the robust adoption of consumer credit loans among organizations and consumers to provide financial convenience.
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| Countries | Forecast CAGR (2024 to 2034) |
|---|---|
| The United States | 12.70% |
| Germany | 8.40% |
| Japan | 9.10% |
| China | 14.80% |
| Australia & New Zealand | 12.20% |
The peer-to-peer lending market in the United States is expanding at a CAGR of 12.70%. The market has a crucial role in maintaining North America’s prominence on a global scale.
The thrilling growth assumed for the United States market is due to numerous fintech companies in the country that are investing large sums in research and development activities. As new features are being introduced to platform-based business models, the convenience and demand for them are peaking.
The new features are also aimed at reducing the theft and fraud activities in the P2P lending. The surging adoption of P2P lending platforms in the BFSI sector in the United States is also propelling market growth.
While the alternative lending market is flourishing in the United States, opportunities are yet limited for retail investors. Presently, the go-to option for investment in P2P loans among United States investors is Proper. An indirect way to invest in P2P loans is possible. However, it is less known among the United States citizens, justifying its lower adoption.
Germany prides itself on having an established and diverse P2P lending market in Europe. According to the latest FMI estimates, the market is set to record a CAGR of 8.40% over the upcoming period.
The P2P platform that operates in Germany is Bergfurst, which is a real estate lender. Recently, the company hit the mark of USD 217.31 million lending milestone.
Thanks to Germany’s long track record in P2P lending, it has developed a familiarity with the sector for both lenders and borrowers. Many of the leading European P2P brands like Iwoca and EstateGuru have field offices in Germany.
The German regulation is known to be stringent when it comes to crowd lenders and various fintech lending platforms. So, it turns out that despite having a huge population of lenders and borrowers and relative wealth, the country is home to less than 10% of Europe’s P2P lending platforms.
However, German investors come under the category of active P2P lenders on the continent. The incoming ECSPR, which is short for European Crowdfunding Service Providers Regulation, is likely to make way for more German investors into the P2P fold as it makes it easy for European crowdlenders to function smoothly across EU countries.
This regulation is further projected to accelerate the pace of innovation in Germany, which is going to appreciate the market’s value in the following years.
The peer-to-peer lending market in Japan is expanding at a CAGR of 9.10% in the next ten years. In the historical period, the market grew gradually in Japan owing to many lending options available to customers. The banks have been serving the customers well, but the fintech entrepreneurs have pivoted to a niche, which was not served well by the mega banks.
The journey of growth for the peer-to-peer market has been supported by the government by relaxing its regulations. The market is further projected to expand owing to partnerships, acquisitions, mergers, and constant improvements.
In 2022, Crowd Credit, a P2P lending platform in Japan, by acquired by Bankers Holding. The Tokyo startup provides funds gathered from Japan individual investors to businesses in developing countries in Eastern European regions and South America. Upon the acquisition, Crowd Credit still maintains its current brand name as well as management structure.
In China, the peer-to-peer lending market is projected to observe rapid growth, expanding at a CAGR of 14.80%, outpacing that of the United States by 2.10%. The country is expected to make a substantial contribution to the regional market.
The market has a noteworthy potential since public sector banks pay lower deposit rates and are hesitant to lend loans to small businesses. Lufax, for instance, is a famous peer-to-peer lending platform in China that offers 6-8% interest against the 1.75% provided by the Bank of China.
The rising count of SMEs in the region is supporting the market growth. This is projected to increase the acceptability of consumer credit loans among different end users. Additionally, robust digitization, as well as penetration of internet-connected services in banks, are some other critical industry growth factors that are propelling the peer-to-peer lending market.
The peer-to-peer lending industry in Australia and New Zealand is expected to expand at a CAGR of 12.20% in the next ten years. A growing count of fintech firms in the market are propelling the market growth.
In July 2023, Revolut extended its financial services to New Zealand. The London-based fintech company plans to provide many services, such as P2P payments, in this market. It has already welcomed 26,000 new users in the country.
The financial app charges no fees on foreign exchange transactions and supports more than 200 currencies. The app also allows users to hold five top currencies, including AUD, EUR, NZD, GBP, and USD and is combined with a digital payment card.
Sites that help investors invest in peer-to-peer lending by making it easy and transparent include Prosper, Kiva, and Upstart.
Kiva Helping Businesses Smart Small
Kiva is not just another peer-to-peer lending platform. It is designed for a higher purpose, with lending activities zeroing in on micro businesses and individual entrepreneurs in low-and middle-income countries.
Kiva was built with the mission to reach communities that are underserved and help them thrive with increased financial access. The company posts loans that can upgrade lives and open opportunities.
Proper Making Automatic Investing Easy
Prosper, founded in 2005, was the first peer-to-peer lending site in the United States. From then on it has served beyond 1.4 million borrowers by extending USD 23 billion in loan funding. Investors can show their contribution by funding as little as USD 25.
The auto invest tool of Prosper helps you create a portfolio according to the rating mix that an individual prefers, with many options, so it’s easy to diversify.
Upstart is Suitable for Accredited Investors
Upstart is a popular AI-powered peer-to-peer lending site, which is made for investors and borrowers alike. The company prides itself on gross average returns of 11.2% annually, less than the anticipated annualized loss rate.
Only accredited investors can invest in peer-to-peer lending with Upstart. SEC defines accredited investors as someone with a net worth of >USD 1 million or having an income of USD 2,00,000.
New Developments Transforming the Peer-to-peer Lending Marketplace
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Current projections of the market indicate a valuation of USD 517.2 billion in 2024.
Looking ahead to 2034, the current forecast projects a CAGR of 12.7% for the industry.
FMI predicts the market to reach USD 1,709.6 billion by the year 2034.
The consumer credit segment is predicted to hold a significant market share during the forecast period.
The United States and China are predicted to offer lucrative opportunities for investors and stakeholders.
CommonBond Inc., Funding Circle Limited, and Upstart Network Inc. are powerful players in the peer-to-peer lending industry.
1. Executive Summary 2. Market Overview 3. Market Background 4. Global Market Analysis 2019 to 2023 and Forecast, 2024 to 2034 5. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Business Model 5.1. Traditional 5.2. Marketplace 6. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By End Use 6.1. Consumer Credit 6.2. Mall Business 6.3. Student Loans 6.4. Real Estate 7. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Region 7.1. North America 7.2. Latin America 7.3. Western Europe 7.4. Eastern Europe 7.5. South Asia and Pacific 7.6. East Asia 7.7. Middle East and Africa 8. North America Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country 9. Latin America Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country 10. Western Europe Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country 11. Eastern Europe Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country 12. South Asia and Pacific Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country 13. East Asia Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country 14. Middle East and Africa Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Country 15. Key Countries Market Analysis 16. Market Structure Analysis 17. Competition Analysis 17.1. Prosper Marketplace, Inc. 17.2. CommonBond Inc. 17.3. Upstart Network Inc. 17.4. Funding Circle Limited 17.5. CircleBack Lending, Inc. 17.6. Peerform 17.7. Social Finance Inc. 17.8. Daric Inc. 18. Assumptions & Acronyms Used 19. Research Methodology
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Peer-to-peer Lending Market
