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Peer to Peer Lending Market Trends

Report ID: GMI10045
Published Date: Jun 2024
Report Format: PDF

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Peer to Peer Lending Market Trends

P2P lending is a rapidly expanding business that is being propelled by various developing trends. The growing integration of Machine Learning (ML) and Artificial Intelligence (AI) technology is one of the most notable trends. These developments improve the effectiveness and precision of risk assessment and credit scoring procedures, allowing platforms to assess borrower creditworthiness and manage risks more effectively. Furthermore, blockchain technology is being used to increase transaction security and transparency, which builds consumer trust.

The diversification of P2P lending systems is another trend. Many platforms, which at first concentrated on personal loans, are now branching out into real estate, small business finance, and even green energy initiatives. Platforms can draw in a wider spectrum of investors and borrowers owing to this diversification, promoting market expansion as a whole. Furthermore, P2P lending is becoming more widely available due to the growth of mobile-based platforms and applications, especially in poorer nations where traditional banking infrastructure may be absent.

In addition, regulatory changes have a significant influence on the P2P lending market. Regulators are putting in place frameworks in many nations that offer more security and clarity for investors as well as borrowers, increasing investor confidence and market participation. These laws frequently include provisions for investor protection, data security, and transparency, which serve to reduce some of the risks that come with peer-to-peer lending.

Another noteworthy development is the increased emphasis on financial inclusion. P2P lending platforms are increasingly focusing on small businesses and marginalized communities that find it difficult to get traditional financial sources. These platforms have a significant impact on financial inclusion and economic progress in emerging nations by utilizing technology to reduce operating costs and enhance accessibility.

Authors: Suraj Gujar , Deeksha Vishwakarma

Frequently Asked Questions (FAQ) :

The market size of peer to peer lending reached USD 209.4 billion in 2023 and is set to witness over 25% CAGR from 2024 to 2032, owing to the increasing acceptance of Peer-to-Peer (P2P) lending by investors and borrowers worldwide.

Peer to peer lending industry from the business loans segment is expected to register 28% CAGR from 2024-2032, due to providing companies with an alternative to traditional banks for funding, frequently with quicker approval times and more flexible terms.

North America market held over 30% share in 2023, attributed to the presence of a robust legislative framework and an established financial infrastructure that facilitate the operations of P2P lending platforms in the region.

LendingClub, Prosper Marketplace, Funding Circle, Zopa, RateSetter, Upstart, and SoFi (Social Finance), are some of the major peer to peer lending companies worldwide.