The global peer-to-peer lending market size is expected to reach USD 21.42 billion by 2030, growing at a CAGR of 20.2% from 2023 to 2030, according to a new report by Grand View Research, Inc.
Changing consumer preferences and attitudes toward borrowing and investing have propelled the growth of the peer-to-peer (P2P) lending market. Many individuals prefer borrowing directly from peers or investing in loans that align with their goals. P2P lending allows borrowers and lenders to connect on a more personal level, fostering a sense of community and trust that may be lacking in traditional lending channels.
Key Industry Insights & Findings from the report:
Based on type, the consumer lending segment dominated the market in 2022 with a revenue share of 59.14%. P2P lending offers consumers an appealing choice for accessing affordable loans by providing a combination of lower interest rates and efficient operations
In terms of loan type, the unsecured segment dominated the market in 2022 with a revenue share of 65.08%. P2P lending platforms leverage sophisticated algorithms and data analytics to evaluate borrower creditworthiness, enabling them to manage and mitigate risks associated with unsecured loans effectively
Based on end-user, the business loans segment is anticipated to register the fastest CAGR of 22.3% over the forecast period. P2P lending platforms often have more flexible eligibility criteria and are willing to consider alternative factors beyond traditional credit scores when assessing the creditworthiness of businesses
In terms of purpose type, the home renovation segment is anticipated to register the fastest CAGR of 22.3% during the forecast period. P2P lending platforms attract a diverse pool of investors willing to fund home renovation projects. These investors may be individuals looking to diversify their investment portfolios or those interested in supporting home improvement initiatives
North America dominated the market in 2022 with a revenue share of 30.24%. The presence of established and reputable P2P lending platforms in the region has also built trust among borrowers and investors, contributing to North America’s dominance in the market
Peer-to-Peer Lending Market Growth & Trends
In June 2023, PeerBerry, a European peer-to-peer lending platform, achieved a significant milestone by surpassing 70,000 investors. The platform experienced substantial growth in May, generating increased interest from investors. In addition to its core platform, PeerBerry has also been promoting its sister platform, Crowdpear, which has the same shareholders. Crowdpear has attracted approximately 2,500 international investors, further expanding the reach of the PeerBerry brand and its investment opportunities.
P2P lending platforms leverage digital technologies to create a transparent and efficient lending ecosystem. Through online platforms, borrowers can easily access information about loan terms, interest rates, and fees, enabling them to make informed decisions. Similarly, investors can access detailed borrower profiles and loan information, empowering them to evaluate and select investment opportunities that align with their risk appetite. This transparency fosters trust between borrowers and investors and contributes to the overall growth and credibility of the P2P lending market.
The COVID-19 pandemic has catalyzed the rapid growth and acceptance of the P2P lending market. As physical branches and in-person interactions became limited, borrowers and investors increasingly embraced P2P lending as a convenient and efficient alternative. The digital nature of P2P lending platforms provided a seamless experience, allowing borrowers to access funds, and investors to diversify their portfolios, without needing a physical presence.