Peer to Peer (P2P) Lending Market (By Type: Consumer Lending, Business Lending; By End User: Consumer Credit Loans, Small Business Loans, Student Loans, Real Estate Loans; By Business Model: Marketplace Lending, Traditional Lending) - Global Industry Analysis, Size, Share, Growth, Trends, Regional Outlook, and Forecast 2024 – 2033


Peer to Peer (P2P) Lending Market Size and Growth 2023 to 2032

The global peer to peer (P2P) lending market size was valued at USD 110.9 billion in 2023 and it is expected to hit over USD 1,168.1 billion by 2033 with a registered CAGR of 26.6% from 2024 to 2033. The growth of the peer-to-peer (P2P) lending market is attributable to the increasing requirement for education loans and healthcare financing. Owing to the high gross domestic product (GDP), favorable economic policies, and early adoption of the latest financial alternatives, the peer-to- peer (P2P) lending market is predicted to grow remarkably.

P2P Lending Market Size 2024 to 2033

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Key Takeaways

  • North America has captured highest revenue share of around 37.51% in 2023.
  • By Type, consumer lending segment has generated 62.66% revenue share ion 2023.
  • By End User, consumer credit loans segment ha accounted 35.2% revenue share in 2023.
  • By Business Model, traditional lending segment has held revenue share of 56% in 2023.
  • Marketplace lending business model segment has garnered 44% revenue share in 2023.

Peer to Peer (P2P) Lending Market in U.S. 2024 To 2033

The U.S. peer to peer (P2P) lending market size reached US 26.3 billion in 2023 and it is predicted to expand USD 270.4 billion by 2033 with a CAGR of 26.3% from 2024 to 2033.

U.S. Peer to Peer (P2P) Lending Market Size 2024 To 2033

North America dominated the peer to peer (P2P) lending market in 2023. North America generally has a more conducive regulatory environment for P2P lending compared to other regions. Regulatory clarity and frameworks that facilitate lending activities have allowed platforms to operate more smoothly and attract both borrowers and investors. North America generally has a more conducive regulatory environment for P2P lending compared to other regions. Regulatory clarity and frameworks that facilitate lending activities have allowed platforms to operate more smoothly and attract both borrowers and investors. North America has a well-established credit infrastructure, including credit bureaus and scoring systems, which facilitates the assessment of borrower creditworthiness. This infrastructure reduces the risk for lenders participating in P2P lending platforms and encourages investor participation.

Peer to Peer (P2P) Lending Market Share, By Region, 2023 (%)

Asia-Pacific, on the other hand, is expected to develop at the fastest rate during the forecast period. China dominates the peer to peer (P2P) lending market in Asia-Pacific region. The peer to peer (P2P) lending market is growing in Asia-Pacific region due to growing number of small and medium sized enterprises. The government of emerging nations such as China and India are constantly taking efforts for the promotion of cashless technologies. This factor is boosting the growth of peer to peer (P2P) lending market in the region.

  • Europe peer to peer (P2P) lending market size was valued at USD 30.6 billion in 2023 and it is expanding at a CAGR of 26.6% from 2024 to 2033.
  • Asia Pacific peer to peer (P2P) lending market size was estimated at USD 26.6 billion in 2023 and it is anticipated to reach at a CAGR of 27.3% from 2024 to 2033.
  • U.K. peer to peer (P2P) lending market size was exhibited at USD 6.5 billion in 2023 and is expanding at a CAGR of 27% from 2024 to 2033.
  • China peer to peer (P2P) lending market was accounted at USD 8 billion in 2023 and it is projected to grow at a CAGR of 26.8% from 2024 to 2033.
  • Japan peer to peer (P2P) lending market size was surpassed at USD 5.1 billion in 2023 and it is expanding at a CAGR of 27.7% from 2024 to 2033.
  • France peer to peer (P2P) lending market size was valued at USD 5.8 billion in 2023 and it is growing at a CAGR of 26.7% from 2024 to 2033.

Growth Factors

The peer to peer (P2P) lending is a process or procedure of lending money or loans to businesses as well as individuals through online applications or website. The peer to peer (P2P) lending services are quite inexpensive in nature. At the same time, peer to peer (P2P) lending is considered as unsecured form of financial service. One of the key factors driving the growth of global peer to peer (P2P) lending market is growing need and requirement of finance and loans.

The operating fees of peer to peer (P2P) lending platforms are quite less as compared to traditional financial services. The loans on peer to peer (P2P) lending platforms are approved within a short period of time. All of these benefits are paving way for the growth of the global peer to peer (P2P) lending market during the forecast period.

The peer to peer (P2P) lending market is also growing due to rising adoption of digitalization in the banking sector. Due to peer to peer (P2P) lending platforms, the transactions have become more transparent in nature. On the other hand, the strict government regulations for approvals of loans are hindering the growth of the global peer to peer (P2P) lending market. In addition, lack of awareness among people regarding peer to peer (P2P) lending, is also restricting the expansion of global peer to peer (P2P) lending market.

Furthermore, the establishments of small and medium sized enterprises are also driving the demand for peer to peer (P2P) lending in the market globally. The peer to peer (P2P) lending platforms helps in the reduction of costs related to office setup, staffing, and maintenance. Thus, all of these factors are boosting the growth of peer to peer (P2P) lending market.

The impact of the COVID-19 pandemic on the growth of the global peer to peer (P2P) lending market is positive in nature. The major businesses and organizations faced enough problems regarding finance and operations. The peer to peer (P2P) lending platforms helps these organizations to raise funds for their operations.

Another factor driving the growth of global peer to peer (P2P) lending market is technological advancements. The technologies such as internet of things and blockchain technology are helping banking sectors to enhance their growth in global market. This factor is supporting the growth of the global peer to peer (P2P) lending market over the forecast period. In addition, the factors such as growing infrastructural development in building and construction sectors as well as surge in the number of students are also propelling the growth and development of global peer to peer (P2P) lending market.

The primary strategies used by key players in the global peer to peer (P2P) lending market are acquisitions, partnerships, as well as product creation and upgradation. In addition, the government of developed and developing regions is also collaborating with market players for the growth and expansion of the global peer to peer (P2P) lending market.

Report Scope of the Peer to Peer Lending Market

Report Coverage Details
Market Size by 2033 USD 1,168.1 Billion
Growth Rate from 2024 to 2033

CAGR of 26.6%

Largest Market North America 
Fastest Growing Makret Asia Pacific
Base Year 2023
Forecast Period 2024 to 2033
Segments Covered Type, End User, Business Model, Geography
Companies Mentioned Avant LLC, Zopa Bank Limited, Funding Circle, Social Finance Inc., Kabbage Inc., RateSetter, Lending Club Corporation, Prosper Funding LLC, LendingTree LLC, OnDeck

 

P2P Lending Market Market Dynamics

Driver

Flexible Investment Options

Depending on their interests and risk tolerance, investors can manually search through the loans that are accessible on the platform and select which ones to invest in. As a result, investors have complete control over their financial choices and can customize their portfolios to meet certain needs or tastes. To spread risk and possibly boost rewards, investors can distribute their money among a number of loans. Additionally, some platforms provide investors with the opportunity to divide their investment into multiple loans of lesser amounts by offering the option to invest in fractional loan parts. Investors can continually reinvest their profits without human interaction thanks to the automatic reinvestment options offered by many platforms. Thereby, the emergence of flexible investment options act as a driver for the peer to peer (P2P) lending market.

Restraint

Credit Risk Concentration

In peer to peer (P2P) lending market, credit risk concentration is the extent to which a platform's loan portfolio is exposed to a limited number of borrowers or a certain category of borrowers. Should a substantial percentage of loans be originated in a certain geographic area, the platform would be vulnerable to regional legislative changes or economic downturns. The platform may be subject to industry-specific risks if loans are concentrated within a certain industry. For instance, in the event of a downturn in the technology industry, a platform that extends loans primarily to borrowers in that industry may be more vulnerable.

Opportunity

Social Impact Investing

Lending to people or companies that support good social change or have a social mission may be the primary focus of social impact investors. This factor is observed to offer opportunity for the peer to peer (P2P) lending market. This can entail making loans to small companies in marginalized areas, encouraging the development of sustainable energy sources, sponsoring programs for education, or offering microloans to company owners in developing nations. Platforms that offer clear parameters for assessing the social or environmental impact of investments are frequently given preference by social impact loan investors. Platforms that have strong social and environmental standards, actively engage with borrowers to understand their needs and impact, and are open and honest about their lending methods may be given priority.

Type Insights

The consumer lending segment held the largest share in peer-to-peer lending market in 2023. In the peer to peer (P2P) lending market, consumer lending is the act of people borrowing money from other people or organizations online without going through traditional financial institutions like banks. Under this concept, lenders or investors who are willing to fund loans to borrowers are put in direct contact with each other. Both lenders and borrowers sign up on a peer-to-peer lending network. The loan amount, purpose, interest rate that the borrower is prepared to pay, and the length of the loan are all specified in the loan listings that the borrower creates. On the site, borrowers create loan listings with information on the loan amount, purpose, interest rate, and period. After looking over these listings, investors select which loans to support in accordance with their investment standards and risk tolerance.

In order to ascertain borrowers' creditworthiness, P2P lending platforms frequently carry out credit assessments and risk evaluations on them. This aids investors in choosing the right loans to fund with knowledge. Investors might make contributions to a loan after it is up for sale. A single loan is usually financed by a number of investors, distributing the risk among them. The borrower accepts the loan amount upon loan funding completion and undertakes to return the loan in accordance with the terms outlined in the loan agreement. Regular repayments from borrowers, often made on a monthly basis, are disbursed to the investors who provided the loan's funding. These repayments usually include principle as well as interest.

Peer to Peer (P2P) Lending Market Share, By Type, 2023 (%)

On the other hand, the business lending segment is observed to witness the fastest rate of expansion. The business lending segment is observed to expand at a significant rate owing to the emergence of multiple small and medium-scale businesses, especially in developing countries. Multiple governments across the globe have started supporting startups to boost the production of goods within the nation. This factor is observed to act as a major growth factor for the segment’s expansion in the peer to peer (P2P) lending market.

Peer to Peer Lending (P2P) Market, By Type, 2022-2023 (US$ Bn)

Type 2022 2023
Consumer Lending 55.2 69.5
Business Lending 32.8 41.3


End User Insights

The consumer credit loan segment dominated the peer to peer (P2P) lending market in 2023. Consumer credit loans are perceived to be less risky as compared to other loans, such as small business loans or personal loans for entrepreneurs. This perception often attracts more lenders to participate in the segment. Consumer credit loans generally offer more predictable returns to investors or lenders due to the regular repayment schedules and lower default rates compare to other types of loans.

Advancements in technology and data analytics allow such platforms to assess borrowers’ creditworthiness more accurately, mitigating the risk associated with consumer credit loans. The segment also caters to wide range of borrowers, from those with excellent credit scores to those with subprime credit, offering lucrative opportunities for lenders and investors.

On the other hand, the student loans segment is observed to witness the fastest rate of expansion during the forecast period. Student loans often come with longer repayment period compared to other types of loans, offering lenders with a steady stream of income over an extended period. In many countries, governments offer support for student loans, reducing the risk for lenders. The demand for student loans is high due to the rising cost of education, especially higher education. This creates a significant market for lenders to tap into.

Peer to Peer Lending (P2P) Market, By End User, 2022-2023 (US$ Bn)

End User 2022 2023
Consumer Credit Loans 31.0 39.0
Small Business Loans 23.5 29.6
Student Loans 19.1 24.0
Real Estate Loans 14.4 18.2


Business Model Insights

The traditional lending segment held the largest market share of 56% in 2023. Traditional lenders benefit from strong brand recognition and extensive marketing efforts, which can attract borrowers seeking loans and investors looking for investment opportunities. Traditional lenders generally have access to larger pools of capital, including deposits and institutional funding, enabling them to offer a wider range of loan products and more competitive interest rates compared to peer to peer platforms that rely on individual investors’ funds. Traditional lenders, such as banks and credit unions typically have long-standing reputations and established trust with consumers. This makes borrowers more inclined to seek financing from these institutions rather than from relatively new peer to peer platforms.

Peer to Peer Lending (P2P) Market, By Business Model, 2022-2023 (US$ Bn)

Business Model 2022 2023
Marketplace Lending 38.7 48.8
Traditional Lending 49.3 62.1


Key Developments

  • Prosper’s team launched a website in June 2018 to improve customer experience. They are mostly concerned with the site’s ease of use and responsiveness. In terms of website upgrades, they completely redesigned two key areas: the account dashboard and the auto invest setup.
  • Faircent.com had begun facilitating loans in COVID-19 low impact Green Zones in May 2020 to capitalize on the untapped market. 
  • Zopa sought for a banking license in 2016 in order to grow its business into a broader range of financial services. Due to the introduction of Open Banking in the UK, a company with new fintech products acquired a full banking license in 2018.  
  • Matrix Partners, a U.S. based investment group, invested around $1.7 million in Liquiloans, an Indian peer to peer (P2P) lending platform, in January 2019. The funds will be used to establish the company as a brand and gain credibility.

Peer to peer (P2P) lending market companies

  • Avant LLC
  • Zopa Bank Limited
  • Funding Circle
  • Social Finance Inc.
  • Kabbage Inc.
  • RateSetter
  • Lending Club Corporation
  • Prosper Funding LLC
  • LendingTree LLC
  • OnDeck

Segments Covered in the Report

By Type

  • Consumer Lending
  • Business Lending

By End User

  • Consumer Credit Loans
  • Small Business Loans
  • Student Loans
  • Real Estate Loans

By Business Model

  • Marketplace Lending
  • Traditional Lending

By Geography

  • North America
    • U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
  • Asia-Pacific
    • China
    • India
    • Japan
    • South Korea
    • Malaysia
    • Philippines
  • Latin America
    • Brazil
    • Rest of Latin America
  • Middle East & Africa (MEA)
    • GCC
    • North Africa
    • South Africa
    • Rest of the Middle East & Africa

Frequently Asked Questions

What is the current size of peer to peer (P2P) lending market?
The global peer to peer (P2P) lending market size was reached at USD 110.9 billion in 2023 and is anticipated to rake around USD 1,168.1 billion by 2033.
What will be the CAGR of global peer to peer (P2P) lending market?
The global peer to peer (P2P) lending market is expanding at a CAGR of 26.6% from 2024 to 2033.
Who are the major players operating in the peer to peer (P2P) lending market?
The major players operating in the peer to peer (P2P) lending market are Avant LLC, Zopa Bank Limited, Funding Circle, Social Finance Inc., Kabbage Inc., RateSetter, Lending Club Corporation, Prosper Funding LLC, LendingTree LLC, and OnDeck.
Which are the driving factors of the peer to peer (P2P) lending market?
A lack of public understanding about peer to peer (P2P) lending is limiting the growth of the worldwide P2P lending sector. Furthermore, the growth of small and medium-sized businesses is fueling the need for peer-to-peer (P2P) financing around the world.
Which region will lead the global peer to peer (P2P) lending market?
North America region will lead the global peer to peer (P2P) lending market in the next ten years.

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