Crowdlending (Business) Market Size, Share & Trends Analysis Report By Type (Alternative Financing, Small Business Loans), By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global crowdlending (business) market size was valued at USD 359.46 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 5.5% from 2021 to 2028. Approval of loans quickly to the SMEs and Freelancers as compared to banks is the key growth driver for the market. Moreover, a lower interest rate on loans for borrowers is another factor that drives the growth of the market. COVID-19 outbreak positively impacted the market. In recent years, crowdlending has been praised as an untapped and enormous new opportunity for entrepreneurs and startups that have challenges in finding funding from traditional methods.

Crowdlending platforms allow a large number of people to come together to lend money to a business in the form of a loan in exchange for interests and dividends. Crowlending is also called lending-based crowd funding. It mainly permits firms to finance themselves through a large and diverse group of individuals, without having to go to a bank. This platform has gained popularity among borrowers in the U.S. and other established markets such as the U.K. owing to their minimum interest rates, lower cost structure, and easy application process.

Crowdlending provides private individuals, SMEs, and self-employed people an interesting alternative to a traditional bank loan, allowing them to get finance in a straightforward way and reasonable conditions. As a rule, financing applications are studied by the provider via an internal scoring system and are checked against additional minimum necessities such as turnover. Then, these financing requests can be financed by private and institutional investors at a suitable interest rate calculated by the credit rating of the business. This makes it possible for SMEs to borrow rapidly and easily, as the basic necessities for getting finance are more flexible compared to traditional bank loans.

The COVID-19 pandemic has positively affected the growth of the crowdlending (business) market. The pandemic has also played a significant role in pushing the growth of the market. According to a recent study by Master card, 42% of Europeans operate their finances online, more frequently than before the COVID-19 pandemic, while 62% have been thinking about changing from traditional banking to online platforms. The shift toward online platforms provides new opportunities for bank-independent loans and online marketplaces that offer private loans. Therefore, it is expected that the crowdlending market will grow steadily in near future.

Type Insights

The alternative financing segment dominated the market and contributed to a revenue share of more than 65% in 2020 and is projected to expand at a CAGR of 5.3% from 2021 to 2028. Alternative financing is a business that manages non-bank funding to SME businesses through loans, finance, or the buying of equity. Moreover, alternative financing has grown from a little-known source of funding to a mainstream alternative, giving business owners more options for financing the growth and expansion of their business. SME businesses frequently use alternative financing for their finance requirements. Thus, the segment contributed more to the market revenue.

The small business loans segment is expected to witness the highest CAGR of 5.8% from 2021 to 2028. Crowdlending has become a funding source across multiple sectors. It is increasingly used to support a wide range of for-profit activities and businesses. The demand for small and medium enterprises loans has been witnessing a rapid rise over the last couple of years. Thus, the small business loans segment is expected to witness the fastest growth over the forecast period.

Regional Insights

North America is forecast to register the highest CAGR of 6.0% from 2021 to 2028.According to the Global Entrepreneurship Monitor, the start-ups in the U.S. hold over a substantial 17.4% share of the country's total population. This shows the massive opportunity for crowdlending in this region. In addition, with the large market of crowdlending in North America, this opportunity further expands. Thus, the region is expected to expand at the fastest CAGR over the forecast period.

The Asia Pacific region accounted for a significant market revenue share of more than 80% in 2020. China is a major contributor in the region. The idea of crowdlending was first presented in China by Credit Ease in 2006. New improvements in financial technology, better accessibility of public personal data, well internet bandwidth, least regulations, and concentrated markets have given rise to crowdlending platforms, thus, contributing to more revenue generation in Asia pacific.

Key Companies & Market Share Insights

The market is characterized by the presence of established as well as new players. Major players operating in this market are making some changes to its Buy-to-Let (BTL) suite, such as the introduction of new pay rate products as well as the repricing of its standard BTL range to attract new customers and to increase market share. Mergers and acquisitions among platforms are popular in the crowdlending market in most countries. Some of the prominent players operating in the global crowdlending (business) market are:

• Kickstarter, PBC
• Indiegogo, Inc.
• GoFundMe, Inc.
• Teespring, Inc.
• CircleUp Network Inc.
• Gust, Inc.
• Crowdfunder Ltd
• Mightycause Corporation
• OurCrowd Management Limited
• SeedInvest Technology, LLC

Crowdlending (Business) Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2028. For this study, Million Insights has segmented the global crowdlending (business) market report based on type and region:

• Type Outlook (Revenue, USD Billion, 2017 - 2028)
  • Alternative Financing
  • Small Business Loans
• Regional Outlook (Revenue, USD Billion, 2017 - 2028)
  • North America
    • U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
  • Asia Pacific
    • China
    • India
    • Japan
  • Central & South America
    • Brazil
    • Argentina
  • Middle East & Africa
    • Saudi Arabia
    • South Africa