The Global Alternative Lending Platform Market size is expected to reach $8.2 billion by 2028, rising at a market growth of 22.0% CAGR during the forecast period.
The broad range of credit choices offered to consumers and business owners in addition to typical bank loans is referred to as alternative lending. In other terms, it refers to the procedure of accepting loans from financial entities that are not banks or other non-banking organizations. Since traditional banks have refused to finance blue-collar workers, freelancers, or gig workers due to their insufficient credit histories, alternative lending has grown significantly over the past few years.
In poor countries, a large segment of the population still uses antiquated procedures to get loans. Pawn shops, where consumers deposit valuables, are regularly used to acquire loans. In a variety of circumstances, people borrow money from friends and family members. Small and medium-sized enterprises were severely hit worldwide by the pandemic, which gave alternative finance, often known as alt lending, a boost. The shutdown forced numerous businesses to shut down.
Many smaller businesses filed for bankruptcy, and many business owners lacked the funding to reopen their operations after the lockdown was removed. These small business owners usually lacked the credit history needed to be approved for a loan, and those with a history of insolvency would find it difficult to get any money from a traditional bank. By offering services to the unbanked subprime customer group, non-banking firms are stepping in to close the gap.
Alternative lenders employ technology to enter markets that traditional banks had not yet looked at. They are also making more money since they are making many smaller loans. To mine the applicant's data, alternative lenders employ a combination of machine learning, computer algorithms, and artificial intelligence. These details frequently involve money matters, spending patterns, purchasing histories, and other things.
Despite having fewer consumers overall, alternative lending sites have seen a considerable rise in users. This is because many SMEs require prompt loan approvals to maintain their operations during trying times. The commercial launch of the Alternative Lending Platform Market industry may also be significantly delayed as a result of the economic crisis that followed the pandemic. The backbone of technology providers, small and medium-sized businesses, has seen a decline in revenue since the pandemic's debut in 2020. As a result of the supply chain disruptions, market players faced several difficulties. However, as more supplies come online in the second half of 2022, things will get better.
The Internet of Things (IoT) and blockchain-based technologies are being adopted and implemented by alternative financial organizations more frequently. These innovations support the development of the alternative lending platform market by introducing cutting-edge features like simple accessibility and transparency to alternative funding platforms. For instance, a blockchain-based digital solution created by digital products and solutions provider Tavant Technologies fully utilizes data-driven processes to produce alternative funding lifecycles.
Alternative loan services, in contrast to conventional banking methods, are simple to use. A web-based business called Alternative Funding uses social impact bonds and bitcoin to raise money. Consumers can therefore trust alternative financial data, which fuels the expansion of alternative financial products. Alternative finance also lowers the cost of infrastructure, staffing Bray membership, and upkeep of financial services, which all contribute to lower operational costs.
Alternative business financing typically, but not always, has higher rates as well as shorter durations and smaller loan amounts. Although it depends on the type of loan are eligible for, many alternative lenders work with business owners who wouldn't have been approved for a bank loan. This implies that the financing they are eligible for is typically smaller and has a shorter repayment term. Consequently, business owners have less time and less money to spend that additional cash.
Based on the Component, the Alternative Lending Platform Market is divided into Solution and services. The solution segment procured the largest revenue share in the alternative lending platform market in 2021. It is because small and medium-sized businesses (SMBs) are resorting to alternative lending alternatives to resolve their cash emergencies given the challenges associated with obtaining a bank loan for SMBs.
By Deployment, the Alternative Lending Platform Market is bifurcated into On-Premise and Cloud. The cloud segment recorded a significant revenue share in the alternative lending platform market in 2021. Cloud technology not only offers a thorough perspective of client interactions to improve customer service but also lowers overall expenses and boosts operational effectiveness. Additionally, embracing cloud-based deployment allows for remote access, which boosts organizational flexibility.
On the basis of End-use, the Alternative Lending Platform Market is classified into Crowdfunding and Peer-to-Peer Lending. The crowdfunding segment acquired the largest revenue share in the alternative lending platform market in 2021. It is due to the increasing use of social media platforms, which serve as inexpensive promotional tools for crowdfunding sites. Social media's audience gives crowdfunding projects the boost they need to attract a pool of investors from all around the world.
| Report Attribute | Details |
|---|---|
| Market size value in 2021 | USD 2.1 Billion |
| Market size forecast in 2028 | USD 8.2 Billion |
| Base Year | 2021 |
| Historical Period | 2018 to 2020 |
| Forecast Period | 2022 to 2028 |
| Revenue Growth Rate | CAGR of 22% from 2022 to 2028 |
| Number of Pages | 282 |
| Number of Tables | 524 |
| Report coverage | Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Competitive Landscape, Companies Strategic Developments, Company Profiling |
| Segments covered | Component, Deployment, End-use, Region |
| Country scope | US, Canada, Mexico, Germany, UK, France, Russia, Spain, Italy, China, Japan, India, South Korea, Singapore, Malaysia, Brazil, Argentina, UAE, Saudi Arabia, South Africa, Nigeria |
| Growth Drivers |
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| Restraints |
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Region-wise, the Alternative Lending Platform Market is analyzed across North America, Europe, Asia Pacific, and LAMEA. The North America region garnered the largest revenue share in the alternative lending platform market in 2021. It is because numerous important players are present in the area, which contributes to the supremacy. Additionally, technology developments and uptake are fostering regional market expansion.
Free Valuable Insights: Global Alternative Lending Platform Market size to reach USD 8.2 Billion by 2028
The major strategies followed by the market participants are Partnerships. Based on the Analysis presented in the Cardinal matrix; American Express Kabbage Inc. is the forerunner in the Alternative Lending Platform Market. Companies such as Funding Circle Limited, Upstart Network, Inc. and On Deck Capital, Inc. are some of the key innovators in Alternative Lending Platform Market.
The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include Funding Circle Limited, On Deck Capital, Inc., Upstart Network, Inc., American Express Kabbage Inc. (American Express Company), LendingClub Bank (LendingClub Corporation), Zopa Bank Limited, CommonBond, Inc., Prosper Funding LLC, Avant, LLC, and Social Finance.
By Component
By Deployment
By End-use
By Geography
The global Alternative Lending Platform Market size is expected to reach $8.2 billion by 2028.
Internet Of Things Lending Platforms Are Becoming More Popular are driving the market in coming years, however, Smaller Amounts And Shorter Terms Of Alternative Lending restraints the growth of the market.
Funding Circle Limited, On Deck Capital, Inc., Upstart Network, Inc., American Express Kabbage Inc. (American Express Company), LendingClub Bank (LendingClub Corporation), Zopa Bank Limited, CommonBond, Inc., Prosper Funding LLC, Avant, LLC, and Social Finance.
The expected CAGR of the Alternative Lending Platform Market is 22.0% from 2022 to 2028.
The On-Premise segment acquired maximum revenue share in the Global Alternative Lending Platform Market by Deployment in 2021 thereby, achieving a market value of $5.1 billion by 2028.
The North America market dominated the Global Alternative Lending Platform Market by Region in 2021, and would continue to be a dominant market till 2028; thereby, achieving a market value of $2.7 billion by 2028.
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