In terms of revenue, the Global Alternative Lending Platform Market is expected to reach USD 730 Billion by 2028, growing at a Compound Annual Growth Rate (CAGR) of 4.90% from 2022 to 2028.
Advancements in technology and the mounting pace of digitization efforts are encouraging potential consumers and existing players to make quick decisions regarding loans which, in turn, is expected to drive the growth of the Alternative Lending Platform market during the forecast period.
Key Highlights from Report:
- The marketplace lending (consumer) segment held a significant share in 2021. Growing digitization in the banking sector, the development of small and medium-sized firms, particularly in emerging countries, and a surge in the number of students seeking educational loans are all predicted to boost demand for marketplace lending (consumer) over the projected period. Online platforms are used to link investors and loan borrowers in marketplace lending. After that, the platform collects principal and interest from borrowers and distributes the funds to investors.
- The crowd lending segment is projected to grow at a considerable CAGR during the forecast period. The industry has evolved from a little-known source of capital to a popular choice, giving business owners more options for financing their company's growth and expansion. As a result, the crowd lending category has a high demand and contributes significantly to market revenue.
- Asia Pacific is expected to grow at the fastest CAGR during the forecast period. According to the Global Entrepreneurship Monitor, start-ups in the United States account for more than 17.4 percent of the population, demonstrating the enormous potential for crowd lending in this region. Furthermore, growing coordination between banks and marketplace lenders has already occurred in the U.S. market. These factors will likely enhance demand for alternative lending, resulting in the area having the quickest CAGR during the projection period.
Consumers and business owners have a wide range of loan options accessible to them outside traditional bank loans, referred to as alternative financing. As small and medium-sized businesses worldwide were severely impacted by the pandemic, alternative finance, often known as alt lending, gained a boost. Many companies were forced to close after the imposition of a complete lockdown. As a result, many small businesses went bankrupt, and many business owners could not reopen their firms after the reopening phase of the lockdown. These small business owners frequently lacked the necessary credit history to obtain a loan, and those with a history of bankruptcy would find it difficult to get any funding from a regular bank.
In the midst of this, non-banking institutions are quickly filling the void by catering to the subprime unbanked. Alternative lenders employ technology to break into a market previously untapped by traditional banking. Furthermore, they profit more by making a considerable number of smaller loans.
North America held the most significant shares in 2021. China was the most critical contributor to the Alternative Lending Platform market growth. The rise in financial organizations' digitization and government measures for alternative lending in emerging nations like India and China are the main drivers of the market's large income generation. Furthermore, significant numbers of small and medium businesses in the Asia Pacific help to grow the Alternative Lending Platform market.