- Borrowers and lenders are flocking to peer-to-peer (P2P) lending platforms.
- In comparison to traditional financial institutions, peer-to-peer lending offers services at a lower price.
Due to the increased use of digitalization in the banking sector, the Peer to Peer (P2P) lending market is expected to grow rapidly over the next few years. P2P lending platforms offer borrowers an alternative to traditional banking products and services by providing them with direct access to lenders.
These platforms typically offer lower interest rates than banks, as well as faster approval times and flexible repayment terms. According to BanklessTimes.com, the global Peer to Peer (P2P) lending market is expected to be valued at over USD 800 Billion by 2028.
BanklessTimes CEO Jonathan said:
BanklessTimes CEO, Jonathan MerryThe banking sector is currently undergoing a major digital transformation, with traditional players such as banks and credit unions investing heavily in new technologies. This is one of the key factors driving the growth of the P2P lending market. Another factor that is fueling the growth of the P2P lending market is the increasing number of small businesses and startups that are turning to P2P platforms for financing."
Blockchain technology is expected to significantly impact the P2P lending market over the forecast period. Blockchain-based P2P lending platforms offer several advantages over traditional P2P lending platforms, including improved security, transparency, and efficiency.
Drivers of The Global P2P Lending Market
Traditional banking products and services have become increasingly difficult to obtain due to the stringent eligibility criteria banks and other financial institutions set.
This has led to a surge in demand for alternative financing products such as P2P loans. P2P loans are typically easier to qualify for than traditional bank loans, as they are based on factors such as creditworthiness and ability to repay.
Another factor is the increasing use of digital technologies by lenders and borrowers. Online platforms and mobile applications have made it easier for lenders and borrowers to connect and transact.
This has led to a significant increase in P2P lending platforms operating in the market. Some of the leading P2P lending platforms include Prosper, Funding Circle, and Upstart.
Global P2P Payment Market: Segments
The global P2P payment market is divided into NFC/smartcard, SMS, and mobile apps. If there is a significant demand for NFC/smartcard products, customers will be better served if we provide them with a simple and efficient payment method.
If the number of people looking for an easier and faster way to send money through their mobile phones is growing, this will directly contribute to the SMS category. The high growth of online and mobile commerce is projected to positively impact the demand for mobile apps in the P2P payments market.
Restraints of the Global P2P Lending Market
The lack of awareness among borrowers and lenders is one of the key restraints. P2P lending is a relatively new concept, and many are unaware of its existence.
Another restraint to the growth of the P2P lending market is the industry’s regulatory uncertainty.
P2P lending platforms are currently unregulated in many jurisdictions, leading to concerns over lenders’ funds’ safety.
The increasing use of innovative technologies such as blockchain and artificial intelligence is a great opportunity in the P2P lending market. These technologies are expected to make the industry more efficient and transparent.
