Global Alternative Lending Business Report 2024: Market to Surpass $1 Trillion by 2028, Driven by Strategic Partnerships, Product Launches and Innovations, & Mergers and Acquisitions - ResearchAndMarkets.com

The "Global Alternative Lending Market Business and Investment Opportunities Databook - 75+ KPIs on Alternative Lending Market Size, By End User, By Finance Model, By Payment Instrument, By Loan Type and Demographics - Q2 2024 Update" report has been added to ResearchAndMarkets.com's offering.

The global alternative lending market is expected to grow by 12.4% on an annual basis to reach US$743.2 billion in 2024. Medium to long term growth story of global alternative lending in remains strong. Alternative lending adoption is expected to grow steadily over the forecast period, recording a CAGR of 8.6% during 2024-2028. The global alternative lending market will increase from US$661.4 billion in 2023 to reach US$1.03 trillion by 2028.

This report provides a detailed data-centric analysis of the alternative lending market covers in-depth market potential and various. Embark on a detailed exploration of the alternative lending market with our latest report, dissecting key economic indicators to provide a holistic view of this dynamic landscape. Delve into the alternative lending market's expansive horizons, from overall market size and forecasts to granular analyses of end-user segments, diverse finance models, and payment instrument intricacies.

The Global alternative lending sector is experiencing robust growth driven by technological advancements and increasing demand for flexible financing. Key developments include innovative product launches, strategic partnerships, and significant mergers and acquisitions. However, the sector faces challenges from heightened regulatory scrutiny and potential economic fluctuations. While the outlook remains positive, stakeholders must navigate evolving regulations and market dynamics to sustain progress and address emerging risks.

This report also helps in navigating the nuanced relationships between payment instruments and lending models, offering a detailed breakdown of transaction dynamics. Uncover the multifaceted nature of loans, from personalized B2C offerings like payroll advances to strategic B2B solutions like lines of credit. Complementing these insights, delve into consumer attitudes and behaviours, decoding the impact of age, income, and gender on financial choices.

Growth in the Alternative Lending Sector

The alternative lending sector has experienced significant growth, driven by increasing demand for flexible financing options among consumers and small businesses, particularly amid economic uncertainties. Key sub-segments such as peer-to-peer lending and marketplace lending have gained traction, with a notable shift towards institutional investors now providing larger loans, reflecting a broader trend towards digital and streamlined lending processes.

Looking ahead, the next few months are expected to see continued expansion in alternative lending, fueled by advancements in technology and the integration of data analytics to enhance risk assessment and customer experience. However, potential challenges such as regulatory scrutiny and economic fluctuations may impact growth dynamics in this evolving landscape.

Key Developments in the Alternative Lending Sector

Product Launches and Innovations

Peer-to-Peer Lending

• In March 2024, Pismo, a fintech firm based in Brazil, introduced a new lending tool to simplify the loan process for consumers by disbursing loans digitally and faster than traditional banks.
• In India, savings startup Jar revealed plans to foray into the digital lending segment by entering strategic alliances with non-banking financial institutions like Liquiloans to provide credit services.

SME Lending

• In February 2024, Lulalend, a South African digital lender, raised $35 million in Series B funding to accelerate growth and launch new products. The firm has embedded its credit solution into partners like Vodacom, Takealot, and Yoco to disburse credit to construction, retail, and hospitality SMEs.

Consumer Lending

• PhonePe, a leading Indian fintech player, announced plans to apply for an NBFC license to enter the consumer lending market and diversify its revenue stream.
• Jupiter, an Indian neo-banking platform, secured an NBFC license from the central bank to offer lending products.

Strategic Partnerships

• BNY Mellon and CIFC: In March 2024, BNY Mellon expanded its partnership with alternative credit specialist CIFC, allowing BNY Mellon Investment Management access to CIFC's U.S. direct lending strategy on its global distribution platform. This collaboration addresses the demand for private capital, particularly in underserved European markets.
• JPMorgan Chase and FS Investments / Octagon Credit Investors - JPMorgan Chase was reportedly forming partnerships with FS Investments and Octagon Credit Investors. These partnerships are intended to broaden JPMorgan's private credit efforts, reflecting a strategic move to enhance its offerings in the competitive alternative lending landscape.
• Jar and Liquiloans: In India, the savings startup Jar announced strategic alliances with non-banking financial institutions, including Liquiloans, to enter the digital lending segment. This partnership is designed to tap into the growing demand for credit in a market with significant interest from fintech players.

Mergers and Acquisitions

• Blackstone and Cvent: Blackstone's acquisition of Cvent for $4.1 billion also highlights the trend of private equity firms investing in technology-driven companies within the financial services sector, which includes alternative lending solutions.
• Avantax and Cetera Financial Group: Cetera Financial Group, backed by Genstar Capital, acquired Avantax for about $1.2 billion. This acquisition is part of a broader trend where financial services firms are merging to create more comprehensive service offerings and capitalize on synergies.
• Fairstone Bank and Home Trust Company - Fairstone Bank and Home Trust Company merged to become the leading alternative lender in Canada, serving over 2 million customers through 250+ branches nationwide.
• Ageras Acquires French SME FinTech Shine - Ageras signed an exclusive agreement to acquire French SME FinTech Shine, aiming to strengthen its position as a banking and accounting software provider for SMEs in France. This move builds on its entry into the market in 2021 with the acquisition of pan-European invoicing software Zervant.

Regulatory Changes

Several key regulatory and government policy developments have impacted the alternative lending sector globally:

• Increased Regulatory Scrutiny: U.S. banking regulators have increased scrutiny across the financial sector, focusing on consumer protection and the need for robust governance and risk management among non-bank lenders and fintech companies.
• Proposed Regulatory Changes: In 2024, significant proposals, including updates to capital requirements and consumer compliance regulations, are expected to enhance the safety and soundness of the banking sector. These changes will impact alternative lenders, necessitating adjustments in their operational and compliance strategies.
• Focus on Consumer Protection and Fair Lending: Regulators are focusing on consumer protection, fair lending practices, and risks associated with third-party partnerships in the fintech industry to ensure consumer fairness and adherence to lending standards.

These developments reflect a broader trend of increasing regulatory oversight in the alternative lending sector, as governments and regulators seek to balance innovation with consumer protection and financial stability.

Key Attributes:

Scope

Economic Indicators

• Gross Domestic Product at Current Prices
• Population
• Unbanked Population
• Unemployment Rate
• Loan Default Rate

Alternative Lending Market Size and Forecast

• Transaction Value
• Average Transaction Value
• Transaction Volume

Alternative Lending Market Size and Forecast by End User

• End User - Business
• End User - Consumer

Alternative Lending Market Size and Forecast by Finance Models

• P2P Marketplace Consumer Lending
• P2P Marketplace Business Lending
• P2P Marketplace Property Lending
• Balance Sheet Consumer Lending
• Balance Sheet Business Lending
• Balance Sheet Property Lending
• Invoice Trading
• Debt Based Securities
• Equity Based Crowd Funding
• Real Estate Crowd funding

Alternative Lending Market Size and Forecast by Payment Instrument - Transaction Value, Volume and Average Value

• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money

Alternative Lending Market Size and Forecast by Payment Instrument to Model

Alternative Lending Market Size and Forecast by Payment Instrument to P2P Marketplace Consumer Lending

• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money

Alternative Lending Market Size and Forecast by Payment Instrument to P2P Marketplace Business Lending

• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money

Alternative Lending Market Size and Forecast by Payment Instrument to P2P Marketplace Property Lending

• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money

Alternative Lending Market Size and Forecast by Payment Instrument to Balance Sheet Consumer Lending

• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money

Alternative Lending Market Size and Forecast by Payment Instrument to Balance Sheet Business Lending

• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money

Alternative Lending Market Size and Forecast by Payment Instrument to Balance Sheet Property Lending

• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money

Alternative Lending Market Size and Forecast by Payment Instrument to Invoice Trading

• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money

Alternative Lending Market Size and Forecast by Payment Instrument to Debt Based Securities

• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money

Alternative Lending Market Size and Forecast by Payment Instrument to Equity Based Crowd Funding

• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money

Alternative Lending Market Size and Forecast by Payment Instrument to Real Estate Crowd funding

• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money

Alternative Lending Market Size and Forecast by Loan Types

• B2C Loans
• Personal Loan
• Payroll Advance
• Home Improvement
• Education/Student Loans
• Point of Sale
• Auto Loans
• Medical Loans
• B2B Loans
• Lines of Credit
• Merchant Cash Advance
• Invoice Factoring
• Revenue Financing

Alternative Lending Analysis by Consumer Attitude and Behaviour

• By Age
• By Income
• Gender

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