Europe Alternative Lending Business Report 2024: A $125+ Billion Market by 2028, Driven by Rising Demand for Flexible Financing Solutions Amid Tighter Traditional Bank Lending - ResearchAndMarkets.com

The "Europe 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" report has been added to ResearchAndMarkets.com's offering.

The alternative lending in the region is expected to grow by 13.9% on an annual basis to reach US$89.4 billion in 2024. The alternative lending market in the region will increase from US$78.5 billion in 2023 to reach US$126.5 billion by 2028. Alternative lending adoption is expected to grow steadily over the forecast period, recording a CAGR of 9.1% during 2024-2028.

This report provides a detailed data-centric analysis of the alternative lending market covers in-depth market potential and various. It 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.

The alternative lending sector in Europe is rapidly expanding, driven by rising demand for flexible financing solutions amid tighter traditional bank lending. Recent developments, including significant product launches, strategic partnerships, and regulatory changes like AIFMD 2.0, highlight the sector's growth and adaptation. As traditional credit conditions tighten, alternative lending is set to play a crucial role in providing innovative funding options supported by increased investment and evolving market strategies.

Growth in the Alternative Lending Sector

The alternative lending market in Europe has shown significant growth, driven by increased demand for flexible financing solutions amid tightening traditional bank lending conditions. This trend is expected to continue, with various sub-segments, such as peer-to-peer lending and real estate debt financing, gaining traction as businesses and consumers seek innovative funding options in a challenging economic environment. Looking ahead, the sector is poised for further expansion, bolstered by ongoing investments and the adaptation of lending models to meet evolving market needs.

Key Developments in the Alternative Lending Sector

Product Launches and Innovations

ArK Kapital Expands Presence in Germany with New Offerings - ArK Kapital, an alternative lending provider in Europe plans to use the capital to expand its presence in the German market and introduce new lending products in 2023.

October to Provide Credit to European SMEs - October, an alternative lender focused on the SME market, aims to use the capital to provide credit to over 3,000 SMEs in Europe over the next two years, targeting a total of €400 million in lending.

Strategic Partnerships

ArK Kapital Partners with MasterCard to Deliver Innovative Lending Solutions

In March 2023, ArK Kapital, a leading alternative lending provider in Europe, announced a strategic partnership with MasterCard. The collaboration aims to deliver innovative lending solutions to businesses across the region, leveraging ArK Kapital's expertise in alternative financing and MasterCard's extensive payment network and technology capabilities.

October Teams Up with European Investment Fund and Invest-NL to Expand SME Lending

October, an alternative lender focused on the SME market, partnered with the European Investment Fund and Invest-NL in January 2023. The €35 million funding round will enable October to provide credit to over 3,000 SMEs in Europe over the next two years, targeting a total of €400 million in lending.

Mergers and Acquisitions

Ageras Acquires French SME FinTech Shine - In June 2024, Ageras signed an exclusive agreement to acquire French SME FinTech Shine. With this acquisition, Ageras aims to strengthen its position as a banking and accounting software provider for SMEs, expanding its foothold in France. The region has been a core market for the Danish FinTech since its entry in 2021 with the acquisition of pan-European invoicing software Zervant.

NatWest Group to Buy Sainsbury's Retail Banking Business - NatWest Group is set to acquire Sainsbury's retail banking business as the supermarket company withdraws from the sector to focus on grocery. The £3.2 billion deal comprises Sainsbury's outstanding credit card, unsecured personal loan and savings accounts. The acquisition will increase NatWest's assets and customer accounts, aligning with its strategy to expand its retail banking operations.

Shift4 Acquires Majority Stake in Vectron Systems AG - Shift4, a specialist in integrated payments and commerce technology, has acquired a majority stake in Vectron Systems AG, one of the largest European suppliers of point-of-sale (POS) systems to the restaurant and hospitality verticals. Shift4 has also completed its previously announced acquisition of Revel Systems, which has over 18,000 merchant locations across the US and internationally.

Regulatory Changes

AIFMD 2.0 Implementation - The amended Alternative Investment Fund Managers Directive (AIFMD 2.0) came into force on April 15, 2024, with full implementation expected by April 16, 2026. This directive introduces specific regulations for alternative investment funds (AIFs) that originate loans, aiming to enhance investor protection and ensure financial stability. Key provisions include prohibiting "originate to distribute" strategies, imposing a risk retention requirement of at least 5% for loans sold, and establishing additional reporting and disclosure obligations for AIFs engaged in loan origination activities.

Cross-Border Loan Origination Passport - AIFMD 2.0 also lays the groundwork for a "cross-border loan origination passport" for EU AIF managers. This initiative is intended to facilitate cross-border lending within the EU, allowing AIFs to operate across member states. However, the effectiveness of this passport will depend on the national implementation of the directive by EU member states, which are required to adopt the necessary laws by April 2026.

Enhanced Credit Standards and Lending Conditions - The European Central Bank (ECB) has noted a tightening of credit standards across various sectors, including alternative lending. This tightening is attributed to perceived credit risks and macroeconomic factors, leading to more stringent lending conditions for enterprises and consumers. As a result, banks are expected to continue tightening their lending criteria, which could influence the demand for alternative lending solutions in the near future.

Key Attributes:

Scope: A 17 Report Bundled Offering

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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