The peer-to-peer (P2P) lending market was valued at $26,064 million in 2015 and is projected to reach $460,312 million by 2022, growing at a compound annual growth rate of 51.5 per cent from 2016 to 2022.
The growth prediction is from Research and Markets, who have announced the addition of a new title, Peer to peer Lending by End-User Types and Business Model type: Global Opportunity Analysis and Industry Forecast, 2014-2022, to their offering.
The report says the P2P lending industry is seeing robust growth in the developed economies of Europe and North America, owing to strong financial markets. The US has the largest P2P lending market in the world by loan volume while Europe is second.
There has been a rapid growth in these lending platforms, and the scale has been achieved through lowers costs compared to established banks and financial institutions. Other factors which have driven the growth of the overall P2P lending industry are an increase in the awareness of the sector along with increased transparency, higher returns to investors and lower interest rates for borrowers.
In the UK, awareness of alternative finance is still very low, but according to the British Business Bank on the increase. It reports awareness of P2P lending has increased by five per cent from 40 per cent during 2015 to 45 per cent during 2016. However, the focus of the alternative finance industry is still clustered around London and the South East.
Other key takeaways from the Research and Markets Report:
- North America generates the highest revenue and is projected to dominate the market for the foreseeable future.
- Asia- Pacific will witness the highest CAGR of 54.1 per cent mainly led by China.
- P2P lending platforms are most suitable for small scale business and consumer credit loans.