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Global Peer to Peer Lending Market by End-user (Consumer Credit Loans, Small Business Loans, Student Loans, and Real Estate Loans) and Business Model Type (Alternate Marketplace Lending and Traditional Lending) - Global Opportunity Analysis and Industry Forecast, 2014-2022

BF 171948
Pages: 110
Mar 2017 | 3785 Views
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Author's : Shoaib Iqbal
Tables: 40
Charts: 47
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Peer to Peer (P2P) Lending Market Overview:

Peer to Peer (P2P) Lending Market is projected to grow at a CAGR of 51.5% from 2016 to 2022, to reach $460,312 million by 2022. Peer to peer (P2P) lending is also referred as marketplace lending. The P2P lending industry is among the fastest growing segment in the financial lending market. It is an alternate way of lending money virtually. The core functioning of marketplace lending platforms is connecting consumers/borrowers with investors/lenders, majorly through online medium. The p2p lending market is driven by growth in emerging markets owing to increase in knowledge of marketplace lending, greater investment transparency, and lower interest rates to consumers.

The report segments the global peer to peer lending market based on end-user types, business model type, and geography. By end-user types, the market is segmented into consumer credit loans, small business loans, student loans, real estate loans. On the basis of the business model, the market is categorized into alternate marketplace lending, and traditional lending. Geographically, the market is further analyzed across, North America (U.S., Canada, and Mexico), Europe (UK, Germany, France, and Rest of Europe), Asia-Pacific (China, Australia, and rest of Asia-Pacific), and LAMEA (Latin America, Middle East, and Africa).

Peer to Peer (P2P) Lending Market Segmentation

Peer To Peer Lending Market Segmentation

Small Business Lending is the Major Driver

After the financial crisis in 2008, banking and financial institutions are trying to deleverage traditional market and market loss risk by divulging in alternative lending activities such as crowdfunding, peer to peer lending. This has led to the reduction of loan finance for small and medium-sized businesses and individual borrowers as they are considered to be risky by the traditional banks as they might not be able to repay the loans at all. The P2P lending industry has successfully filled a massive and long required need for an alternative lending platform other than the traditional banking system. The evolution of technology has led to easy access capital for micro, small and medium enterprises.

Peer to peer lending companies have stepped-in, to capitalize on the opportunity available to help grow small business borrower’s needs. Alternative small business lending platforms use machines and digital tools to provide credit facility to a wide range of small businesses quickly and efficiently, predominantly to those who have been rejected by banks. Thus, small businesses act as a major end user in peer to peer lending market. For instance, small businesses form the backbone of the U.S. economy of all jobs, according to the U.S. small business administration. And these businesses need capital in order to grow.

U.S. Alternative Small Lending Market Share

Asia-Pacific is a Lucrative Peer to Peer Lending Market

P2P lending market share took off in China in 2015 and have attracted much investment as well as controversies. Investors were frustrated by the low rates offered by traditional banks in China, so P2P service providers have replied too well to banking also known as shadow banking in lieu of finding better returns. The P2P lending market uses online platforms and allows effective access for borrowers and lenders. In China, the model has been quickly adopted by alternate banking systems and has also attracted significant venture capital. Over the past two years, the P2P lending market share of companies in China has nearly tripled. Despite some of China’s headline-grabbing P2P lending market scandals, both the supervisory environment and business quality for P2P loans are improving. In 2015, the Chinese government released a new set of rules targeting peer to peer loans. These rules are aimed to offer much-needed protection to investors as well as operational guidelines for P2P operators.

Lesser Operating Cost and Low Market Risk

P2P lending is a type of crowdfunding which involves the easy availability of loans outside of the traditional consumer banking system by providing borrowers a platform to interact with lenders, or investors, via the P2P lending service providers. The use of Internet platforms reduces costs by excluding operational expenses which are associated with the traditional banking system, such as the cost of maintaining and staffing, physical branches etc. In some cases, this cost saving is passed to borrowers through lower interest rates than those offered by traditional banks.

In general, a bank would sit in between the two parties, taking the risk but also the bulk of the return. For example; the marketplace model offered high returns to lenders at a time when interest rates are at historic lows and the UK stock market has been volatile.

According to data from peer-to-peer finance association, peer-to-peer lending has been growing very fast and provided £1.6bn ($1.76bn) in loans at the end of June 2016.

The peer-to-peer websites offer a protection from market losses incurred due to non-payment of loans by maintaining certain funds. Example: Zopa has established the Zopa Safeguard Trust, which currently holds £9.6m ($10.56m) to cover any losses incurred due to non-payment of loans. Also, peer-to-peer lending allows one to participate in pools of loans, thus, limiting the market risk which got evident during the recession period.

Key Benefits

  • A comprehensive analysis of the current trends and future estimations in the global peer to peer lending market are provided.
  • The report elucidates on key drivers, restraints, and opportunities along with a detailed impact analysis from 2014 to 2022.
  • Porter’s Five Forces model of the industry illustrates the potency of the buyers and suppliers in the market.
  • A quantitative analysis of the current scenario and the forecast period highlights the financial competency of the market.
  • The report provides a detailed analysis of the global peer to peer lending market with respect to end-user types, business model types, and geography.

Peer to Peer (P2P) Lending Market Key Segmentation:

By End Users

  • Consumer credit loans
  • Small business loans
  • Student loans
  • Real estate loans

By Business Model

  • Alternate marketplace lending
  • Traditional lending

By Geography

  • North America
    • U.S.
    • Canada
    • Mexico
  • Europe
    • UK
    • Germany
    • France
    • Rest of Europe
  • Asia-Pacific
    • China
    • Australia
    • Rest of Asia-Pacific
  • LAMEA
    • Latin America
    • Middle East
    • South Africa

Market Players in the Value Chain: P2P Lending Market

  • LendingClub Corporation    
  • Funding Circle Limited
  • Prosper Marketplace, Inc.
  • Daric
  • Social Finance, Inc.
  • Zopa Limited    
  • Avant, Inc.
  • onDeck Capital, Inc.
  • RateSetter    
  • Kabbage, Inc.    

Other Players in the Value Chain Include (profiles not included in the report)

  • LendUp
  • Peerform
  • Circleback Lending, LLC.
  • Isepankur
  • Auxmoney GmbH
 

Chapter: 1 INTRODUCTION

1.1. Report description
1.2. Research methodology

1.2.1. Secondary research
1.2.2. Primary research
1.2.3. Analyst tools and models

Chapter: 2 EXECUTIVE SUMMARY

2.1. CXO perspective

Chapter: 3 MARKET OVERVIEW

3.1. Market definition and scope
3.2. Key findings

3.2.1. Top impacting factors
3.2.2. Top investment pockets
3.2.3. Top winning strategies

3.3. Porters five forces analysis
3.4. Market share analysis, 2015
3.5. Market dynamics

3.5.1. Drivers

3.5.1.1. Lesser operating cost and low market risk
3.5.1.2. Technologically advanced with added transparency over traditional banking system.

3.5.2. Restraints

3.5.2.1. Risk of losing all money and higher government restraints
3.5.2.2. Lesser awareness of p2p lending benefits among population

3.5.3. Opportunities

3.5.3.1. Increased awareness may increase usage of peer to peer lending platforms

Chapter: 4 PEER TO PEER LENDING MARKET BY END-USERS

4.1. Overview

4.1.1. Market size and forecast

4.2. Consumer credit loans

4.2.1. Key market trends, growth factors and opportunities
4.2.2. Key player positioning
4.2.3. Market size and forecast

4.3. Small business loans

4.3.1. Key market trends, growth factors and opportunities
4.3.2. Key player positioning
4.3.3. Market size and forecast

4.4. Student loans

4.4.1. Key market trends, growth factors and opportunities
4.4.2. Key player positioning
4.4.3. Market size and forecast

4.5. Real estate loans

4.5.1. Key market trends, growth factors and opportunities
4.5.2. Key player positioning
4.5.3. Market size and forecast

Chapter: 5 PEER TO PEER LENDING MARKET BY BUSINESS MODEL

5.1. Overview

5.1.1. Market size and forecast

5.2. Alternate marketplace lending

5.2.1. Key market trends, growth factors and opportunities
5.2.2. Market size and forecast

5.3. Traditional lending

5.3.1. Key market trends, growth factors and opportunities
5.3.2. Market size and forecast

Chapter: 6 PEER TO PEER LENDING MARKET BY GEOGRAPHY

6.1. Overview

6.1.1. Market size and forecast

6.2. North America

6.2.1. Key market trends, growth factors and opportunities
6.2.2. Market size and forecast

6.2.2.1. By end-user type
6.2.2.2. By business model
6.2.2.3. By country

6.2.2.3.1. U.S.
6.2.2.3.2. Canada
6.2.2.3.3. Mexico

6.3. Europe

6.3.1. Key market trends, growth factors and opportunities
6.3.2. Market size and forecast

6.3.2.1. By end-user type
6.3.2.2. By business model
6.3.2.3. By country

6.3.2.3.1. UK
6.3.2.3.2. Germany
6.3.2.3.3. France
6.3.2.3.4 Rest of Europe

6.4. Asia-Pacific

6.4.1. Key market trends, growth factors and opportunities
6.4.2. Market size and forecast

6.4.2.1. By end-user type
6.4.2.2. By business model
6.4.2.3. By country

6.4.2.3.1. China
6.4.2.3.2. Australia
6.4.2.3.3. Rest of Asia-Pacific

6.5. LAMEA (Latin America, Middle East, and Africa)

6.5.1. Key market trends, growth factors and opportunities
6.5.2. Market size and forecast

6.5.2.1. By end-user
6.5.2.2. By business model
6.5.2.3. By region

6.5.2.3.1. Latin America
6.5.2.3.2. Middle East
6.5.2.3.3. Africa

Chapter: 7 COMPANY PROFILE

7.1. Avant, Inc.

7.1.1. Company overview
7.1.2. Company snapshot
7.1.3. Operating business segments
7.1.4. Business performance
7.1.5. Key strategic moves and developments

7.2. Daric

7.2.1. Company overview
7.2.2. Company snapshot
7.2.3. Operating business segments
7.2.4. Business performance
7.2.5. Key strategic moves and developments

7.3. Funding Circle Limited

7.3.1. Company overview
7.3.2. Company snapshot
7.3.3. Operating business segments
7.3.4. Key strategic moves and developments

7.4. Kabbage, Inc.

7.4.1. Company overview
7.4.2. Company snapshot
7.4.3. Operating business segments
7.4.4. Business performance
7.4.5. Key strategic moves and developments

7.5. Lendingclub Corporation

7.5.1. Company overview
7.5.2. Company snapshot
7.5.3. Operating business segments
7.5.4. Business performance
7.5.5. Key strategic moves and developments

7.6. Ondeck capital, inc.

7.6.1. Company overview
7.6.2. Operating business segments
7.6.3. Business performance
7.6.4. Key strategic moves and developments

7.7. Prosper marketplace, inc.

7.7.1. Company overview
7.7.2. Operating business segments
7.7.3. Key strategic moves and developments

7.8. Ratesetter

7.8.1. Company overview
7.8.2. Operating business segments

7.9. Social Finance, Inc.

7.9.1. Company overview
7.9.2. Company snapshot
7.9.3. Operating business segments
7.9.4. Business performance
7.9.5. Key strategic moves and developments

7.10. Zopa Limited

7.10.1. Company overview
7.10.2. Operating business segments
7.10.3. Business performance
7.10.4. Key strategic moves and developments

LIST OF TABLES

TABLE 1. PEER TO PEER LENDING MARKET BY END-USER TYPE, 2014-2022 ($MILLION) 55
TABLE 2. CONSUMER CREDIT LOAN MARKET REVENUE BY GEOGRAPHY, 2014-2022 ($MILLION)
TABLE 3. SMALL BUSINESS LOAN MARKET REVENUE BY GEOGRAPHY, 2014-2022 ($MILLION)
TABLE 4. STUDENT LOAN MARKET REVENUE BY GEOGRAPHY, 2014-2022 ($MILLION)
TABLE 5. REAL ESTATE LOAN MARKET REVENUE BY GEOGRAPHY, 2014-2022 ($MILLION)
TABLE 6. PEER TO PEER LENDING MARKET BY BUSINESS MODEL, 2014-2022 ($MILLION)
TABLE 7. PEER TO PEER LENDING MARKET FOR ALTERNATE MARKETPLACE LENDING BUSINESS MODEL BY GEOGRAPHY, 2014-2022 ($MILLION)
TABLE 8. PEER TO PEER LENDING MARKET FOR TRADITIONAL LENDING BUISNESS MODEL APPLICATION BY GEOGRAPHY, 2014-2022 ($MILLION)
TABLE 9. PEER TO PEER LENDING MARKET BY GEOGRAPHY, 2014-2022 ($MILLION)
TABLE 10. NORTH AMERICA: PEER TO PEER LENDING MARKET BY END-USER TYPE, 2014-2022 ($MILLION)
TABLE 11. NORTH AMERICA: PEER TO PEER LENDING MARKET BY BUSINESS MODEL, 2014-2022 ($MILLION)
TABLE 12. NORTH AMERICA: PEER TO PEER LENDING MARKET BY COUNTRY, 2014-2022 ($MILLION)
TABLE 13. EUROPE: PEER TO PEER LENDING MARKET BY END-USER TYPE, 2014-2022 ($MILLION)
TABLE 14. EUROPE: PEER TO PEER LENDING MARKET BY BUSINESS MODEL, 2014-2022 ($MILLION)
TABLE 15. EUROPE: PEER TO PEER LENDING MARKET BY COUNTRY, 2014-2022 ($MILLION)
TABLE 16. ASIA-PACIFIC: PEER TO PEER LENDING MARKET BY END-USER TYPE, 2014-2022 ($MILLION)
TABLE 17. ASIA-PACIFIC: PEER TO PEER LENDING MARKET BY BUSINESS MODEL 2014-2022 ($MILLION)
TABLE 18. ASIA-PACIFIC: PEER TO PEER LENDING MARKET BY COUNTRY, 2014-2022 ($MILLION)
TABLE 19. LAMEA: PEER TO PEER LENDING MARKET BY END-USER, 2014-2022 ($MILLION)
TABLE 20. LAMEA: PEER TO PEER LENDING MARKET BY BUSINESS MODEL 2014-2022 ($MILLION)
TABLE 21. LAMEA: PEER TO PEER LENDING MARKET BY REGION, 2014-2022 ($MILLION)
TABLE 22. AVANT, INC.: COMPANY SNAPSHOT

LIST OF FIGURES

FIGURE 1. TOP IMPACTING FACTORS
FIGURE 2. TOP INVESTMENT POCKETS
FIGURE 3. TOP WINNING STRATEGIES
FIGURE 4. BARGAINING POWER OF SUPPLIERS
FIGURE 5. BARGAINING POWER OF BUYERS
FIGURE 6. THREAT OF NEW ENTRANTS
FIGURE 7. COMPETITIVE RIVALRY
FIGURE 8. THREAT OF SUBSTITUTES
FIGURE 9. MARKET SHARE ANALYSIS, 2015
FIGURE 10. COMPARATIVE MARKET SHARE ANALYSIS OF PEER TO PEER LENDING MARKET BY END-USER TYPE, 2015 & 2022 (%)
FIGURE 11. MARKET SHARE ANALYSIS OF CONSUMER CREDIT LOANS, MARKET BY GEOGRAPHY, 2015 & 2022 (%)
FIGURE 12. CONSUMER CREDIT LOAN MARKET REVENUE, 2014-2022($MILLION)
FIGURE 13. MARKET SHARE ANALYSIS OF SMALL BUSINESS LOANS MARKET BY GEOGRAPHY, 2015 & 2022 (%)
FIGURE 14. SMALL BUSINESS LOAN MARKET REVENUE, 2014-2022($MILLION)
FIGURE 15. MARKET SHARE ANALYSIS OF STUDENT LOANS MARKET BY GEOGRAPHY, 2015 & 2022 (%)
FIGURE 16. STUDENT LOAN MARKET REVENUE, 2014-2022($MILLION)
FIGURE 17. MARKET SHARE ANALYSIS OF REAL ESTATE LOAN MARKET BY GEOGRAPHY, 2015 & 2022 (%)
FIGURE 18. REAL ESTATE LOAN MARKET REVENUE, 2014-2022($MILLION)
FIGURE 19. COMPARATIVE MARKET SHARE ANALYSIS OF PEER TO PEER LENDING MARKET BY BUSINESS MODEL, 2014 & 2022 (%)
FIGURE 20. MARKET SHARE ANALYSIS OF PEER TO PEER LENDING MARKET FOR ALTERNATE MARKETPLACE LENDING BUSINESS MODEL BY GEOGRAPHY, 2014 & 2022 (%)
FIGURE 21. PEER TO PEER LENDING MARKET REVENUE FOR ALTERNATE MARKETPLACE LENDING BUSINESS MODEL, 2014-2022($ MILLION)
FIGURE 22. MARKET SHARE ANALYSIS OF PEER TO PEER LENDING MARKET FOR TRADITIONAL LENDING BUSINESS MODEL BY GEOGRAPHY, 2014 & 2022 (%)
FIGURE 23. PEER TO PEER LENDING MARKET REVENUE FOR TRADITIONAL LENDING BUSINESS MODEL, 2014-2022($ MILLION)
FIGURE 24. COMPARATIVE MARKET SHARE ANALYSIS OF PEER TO PEER MARKET BY GEOGRAPHY, 2015 & 2022 (%)
FIGURE 25. NORTH AMERICA PEER TO PEER LENDING MARKET REVENUE, 2014-2022 ($MILLION)
FIGURE 26. U.S.: PEER TO PEER LENDING MARKET REVENUE, 2014-2022 ($MILLION)
FIGURE 27. CANADA: PEER TO PEER LENDING MARKET REVENUE, 2014-2022 ($MILLION)
FIGURE 28. MEXICO: PEER TO PEER LENDING MARKET REVENUE, 2014-2022 ($MILLION)
FIGURE 29. EUROPE PEER TO PEER LENDING MARKET REVENUE, 2014-2022 ($MILLION)
FIGURE 30. UK: PEER TO PEER LENDING MARKET REVENUE, 2014-2022 ($MILLION)
FIGURE 31. GERMANY: PEER TO PEER LENDING MARKET REVENUE, 2014-2022 ($MILLION)
FIGURE 32. FRANCE: PEER TO PEER LENDING MARKET REVENUE, 2014-2022 ($MILLION)
FIGURE 33. ASIA-PACIFIC PEER TO PEER LENDING MARKET REVENUE, 2014-2022 ($MILLION)
FIGURE 34. CHINA: PEER TO PEER LENDING MARKET REVENUE, 2014-2022 ($MILLION)
FIGURE 35. AUSTRALIA: PEER TO PEER LENDING MARKET REVENUE, 2014-2022 ($MILLION)
FIGURE 36. REST OF ASIA-PACIFIC: PEER TO PEER LENDING MARKET REVENUE, 2014-2022 ($MILLION)
FIGURE 37. LAMEA PEER TO PEER LENDING MARKET REVENUE, 2014-2022 ($MILLION)
FIGURE 38. LATIN AMERICA: PEER TO PEER LENDING MARKET REVENUE, 2014-2022 ($MILLION)
FIGURE 39. MIDDLE EAST: PEER TO PEER LENDING MARKET REVENUE, 2014-2022 ($MILLION)
FIGURE 40. AFRICA: PEER TO PEER LENDING MARKET REVENUE, 2014-2022 ($MILLION)
FIGURE 41. AVANT, INC.: COMPANY FINANCIALS
FIGURE 42.
DARIC: COMPANY SNAPSHOT
FIGURE 43. KABBAGE, INC.: COMPANY SNAPSHOT
FIGURE 44. LENDINGCLUB CORPORATION: COMPANY SNAPSHOT
FIGURE 45. ONDECK CAPITAL, INC.: COMPANY SNAPSHOT
FIGURE 46. SOCIAL FINANCE, INC.: COMPANY SNAPSHOT
FIGURE 47. ZOPA LIMITED: COMPANY SNAPSHOT

 

Peer to peer (P2P) lending is also referred as marketplace lending. P2P lending is among the fastest growing segment in the financial lending market. It is an alternative of lending money virtually. The core functioning of marketplace lending platforms is connecting consumers/borrowers with investors/lenders, majorly through online medium.

Peer to peer lending industry is gaining popularity as it removes the role of bankers between the borrower and lender, also offers lower rates to borrowers and higher returns to lenders. The student loan and small business loan segments are the fastest growing segments in peer to peer lending market with high demand in China and in some Latin American countries. China’s P2P industry has grown nearly eight fold between 2012-2015 periods. Although the lending market is still dominated by traditional banks, the knowledge and feasibility of alternative market place lending business model is increasing the market share and is expected to increase in the future. As compared with the traditional banks, peer to peer lending has lesser interest rates, money security, small investment loan additions, and lesser investment cost as it is mainly online.

P2P and OPB (Online platform based Business lending) has emerged to make things easier for people as well as businesses who face difficulty in getting loans only because of their low credit profiles.

The market is dominated by North America and especially the U.S. After 2008 recession and markets instabilities, borrowers started to opt more for alternative means to obtain money and avoid severe money losses and market insecurities. Hence, small merchants seeking loans for their business or to pay off small debts started to shift from traditional bank-led models to marketplace lending platforms. There has been a rapid increase in P2P lending in case of small business loans and consumer credit loans and countries of Asia-Pacific such as China are anticipated to leave U.S. behind in the coming years. On the other hand, Europe is mainly dominated by UK where various peer to peer lending platforms are very well established and have deeper market reach, followed by Western European countries.

Peer to peer lending service providers have to face a number of laws such as federal and state laws, lender licensing, securitization, consumer protection and banking laws. Many states do not require lending licenses for commercial loans but the Security Exchange Commission (SEC) threatens the complete industry by asserting jurisdiction with a fundamental misunderstanding of P2P lending by stating that P2P lending market share is slowly increasing globally. However, what had started out as a simple one-to-many consumer lending solution has thrived into an authentic investment asset class that has attracted the attention of hedge funds, private equity funds, sovereign wealth funds, business development companies, family offices and other professional investment firms due to the better returns offered. Now, even banks are lending through peer-to-peer lending portals.

Market players in online peer to peer lending platforms such as Prosper and Lending Club directly connect borrowers to lenders by eliminating the need for a bank as an intermediary with lesser chances of market loss and if at all any losses incurred will be endured by investors. In addition, these peer to peer lenders have transformed the banking system into a frictionless, transparent and highly efficient online marketplace lending, thus getting an edge over the traditional lending business. These online companies create a marketplace for lenders and borrowers, where lenders can get a higher rate of return on their investments compared to traditional bank deposits.

 

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