The Global Alternative Lending Platform Market size is expected to reach $8.2 billion by 2028, rising at a market growth of 22.0% CAGR during the forecast period.
The broad range of credit choices offered to consumers and business owners in addition to typical bank loans is referred to as alternative lending. In other terms, it refers to the procedure of accepting loans from financial entities that are not banks or other non-banking organizations. Since traditional banks have refused to finance blue-collar workers, freelancers, or gig workers due to their insufficient credit histories, alternative lending has grown significantly over the past few years.
In poor countries, a large segment of the population still uses antiquated procedures to get loans. Pawn shops, where consumers deposit valuables, are regularly used to acquire loans. In a variety of circumstances, people borrow money from friends and family members. Small and medium-sized enterprises were severely hit worldwide by the pandemic, which gave alternative finance, often known as alt lending, a boost. The shutdown forced numerous businesses to shut down.
Many smaller businesses filed for bankruptcy, and many business owners lacked the funding to reopen their operations after the lockdown was removed. These small business owners usually lacked the credit history needed to be approved for a loan, and those with a history of insolvency is expected to find it difficult to get any money from a traditional bank. By offering services to the unbanked subprime customer group, non-banking firms are stepping in to close the gap.
Alternative lenders employ technology to enter markets that traditional banks had not yet looked at. They are also making more money since they are making many smaller loans. To mine the applicant's data, alternative lenders employ a combination of machine learning, computer algorithms, and artificial intelligence. These details frequently involve money matters, spending patterns, purchasing histories, and other things.
The major strategies followed by the market participants are Partnerships. Based on the Analysis presented in the Cardinal matrix; American Express Kabbage Inc. is the forerunner in the Alternative Lending Platform Market. Companies such as Funding Circle Limited, Upstart Network, Inc. and On Deck Capital, Inc. are some of the key innovators in Alternative Lending Platform Market.
The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include Funding Circle Limited, On Deck Capital, Inc., Upstart Network, Inc., American Express Kabbage Inc. (American Express Company), LendingClub Bank (LendingClub Corporation), Zopa Bank Limited, CommonBond, Inc., Prosper Funding LLC, Avant, LLC, and Social Finance.
The broad range of credit choices offered to consumers and business owners in addition to typical bank loans is referred to as alternative lending. In other terms, it refers to the procedure of accepting loans from financial entities that are not banks or other non-banking organizations. Since traditional banks have refused to finance blue-collar workers, freelancers, or gig workers due to their insufficient credit histories, alternative lending has grown significantly over the past few years.
In poor countries, a large segment of the population still uses antiquated procedures to get loans. Pawn shops, where consumers deposit valuables, are regularly used to acquire loans. In a variety of circumstances, people borrow money from friends and family members. Small and medium-sized enterprises were severely hit worldwide by the pandemic, which gave alternative finance, often known as alt lending, a boost. The shutdown forced numerous businesses to shut down.
Many smaller businesses filed for bankruptcy, and many business owners lacked the funding to reopen their operations after the lockdown was removed. These small business owners usually lacked the credit history needed to be approved for a loan, and those with a history of insolvency is expected to find it difficult to get any money from a traditional bank. By offering services to the unbanked subprime customer group, non-banking firms are stepping in to close the gap.
Alternative lenders employ technology to enter markets that traditional banks had not yet looked at. They are also making more money since they are making many smaller loans. To mine the applicant's data, alternative lenders employ a combination of machine learning, computer algorithms, and artificial intelligence. These details frequently involve money matters, spending patterns, purchasing histories, and other things.
COVID-19 Impact Analysis
Despite having fewer consumers overall, alternative lending sites have seen a considerable rise in users. This is because many SMEs require prompt loan approvals to maintain their operations during trying times. The commercial launch of the Alternative Lending Platform Market industry may also be significantly delayed as a result of the economic crisis that followed the pandemic. The backbone of technology providers, small and medium-sized businesses, has seen a decline in revenue since the pandemic's debut in 2020. As a result of the supply chain disruptions, market players faced several difficulties. However, as more supplies come online in the second half of 2022, things will get better.Market Growth Factors
Internet Of Things Lending Platforms Are Becoming More Popular
The Internet of Things (IoT) and blockchain-based technologies are being adopted and implemented by alternative financial organizations more frequently. These innovations support the development of the alternative lending platform market by introducing cutting-edge features like simple accessibility and transparency to alternative funding platforms. For instance, a blockchain-based digital solution created by digital products and solutions provider Tavant Technologies fully utilizes data-driven processes to produce alternative funding lifecycles.Market Risk And Operating Cost Reduction
Alternative loan services, in contrast to conventional banking methods, are simple to use. A web-based business called Alternative Funding uses social impact bonds and bitcoin to raise money. Consumers can therefore trust alternative financial data, which fuels the expansion of alternative financial products. Alternative finance also lowers the cost of infrastructure, staffing Bray membership, and upkeep of financial services, which all contribute to lower operational costs.Market Restraining Factors
Smaller Amounts And Shorter Terms Of Alternative Lending
Alternative business financing typically, but not always, has higher rates as well as shorter durations and smaller loan amounts. Although it depends on the type of loan are eligible for, many alternative lenders work with business owners who is expected ton't have been approved for a bank loan. This implies that the financing they are eligible for is typically smaller and has a shorter repayment term. Consequently, business owners have less time and less money to spend that additional cash.Component Outlook
Based on the Component, the Alternative Lending Platform Market is divided into Solution and services. The solution segment procured the largest revenue share in the alternative lending platform market in 2021. It is because small and medium-sized businesses (SMBs) are resorting to alternative lending alternatives to resolve their cash emergencies given the challenges associated with obtaining a bank loan for SMBs.
Deployment Outlook
By Deployment, the Alternative Lending Platform Market is bifurcated into On-Premise and Cloud. The cloud segment recorded a significant revenue share in the alternative lending platform market in 2021. Cloud technology not only offers a thorough perspective of client interactions to improve customer service but also lowers overall expenses and boosts operational effectiveness. Additionally, embracing cloud-based deployment allows for remote access, which boosts organizational flexibility.End-Use Outlook
On the basis of End-use, the Alternative Lending Platform Market is classified into Crowdfunding and Peer-to-Peer Lending. The crowdfunding segment acquired the largest revenue share in the alternative lending platform market in 2021. It is due to the increasing use of social media platforms, which serve as inexpensive promotional tools for crowdfunding sites. Social media's audience gives crowdfunding projects the boost they need to attract a pool of investors from all around the world.Regional Outlook
Region-wise, the Alternative Lending Platform Market is analyzed across North America, Europe, Asia Pacific, and LAMEA. The North America region garnered the largest revenue share in the alternative lending platform market in 2021. It is because numerous important players are present in the area, which contributes to the supremacy. Additionally, technology developments and uptake are fostering regional market expansion.Cardinal Matrix - Alternative Lending Platform Market Competition Analysis
The major strategies followed by the market participants are Partnerships. Based on the Analysis presented in the Cardinal matrix; American Express Kabbage Inc. is the forerunner in the Alternative Lending Platform Market. Companies such as Funding Circle Limited, Upstart Network, Inc. and On Deck Capital, Inc. are some of the key innovators in Alternative Lending Platform Market.
The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include Funding Circle Limited, On Deck Capital, Inc., Upstart Network, Inc., American Express Kabbage Inc. (American Express Company), LendingClub Bank (LendingClub Corporation), Zopa Bank Limited, CommonBond, Inc., Prosper Funding LLC, Avant, LLC, and Social Finance.
Strategies deployed in Alternative Lending Platform Market
; Partnerships, Collaborations and Agreements:
- Jun-2022: Funding Circle came into a partnership with Magnetar Capital UK, a hedge fund. Through this partnership, Magnetar UK is expected to support thousands of SMEs utilizing Funding Circle’s distribution and technology medium, which the companies express is expected to deliver Magnetar an efficient and cost-effective mechanism to allocate Capital to the entire economy.
- May-2022: Funding Circle formed a partnership with Waterfall Asset Management, an SEC-registered specialist credit adviser. Under this partnership, Waterfall is expected to loan through the Funding Circle platform over two years along with a broad scope of investors, such as individuals, banks, asset management firms, government-backed entities, insurance enterprises, and funds. Additionally, Waterfall is expected to deliver a broad range of investors utilizing Funding Circle's machine learning and technology abilities to loan to SMEs at both scale and speed.
- May-2022: OnDeck formed a partnership with SoFi Technologies along with Together, the companies aimed to deliver best-in-class digital lending outcomes and FinTech portfolio with OnDeck's Machine Learning and Artificial Intelligence expertise, providing small companies more opportunities for receiving an effortless pass to working funds that sustain their growth.
- Mar-2022: Upstart came into a partnership with Sandbox Banking, a BaaS infrastructure company. This partnership is expected to allow Upstart to support its bank and credit union members to more effectively combine Upstart loan and borrower data into their center CRM systems. Additionally, The integration of Upstart's AI-powered lending platform within Sandbox Banking's capacity to simplify the procedure for banks to fulfill their customer lending requirements allows Upstart lending associates to incorporate loan and consumer data seamlessly into main banking systems.
- Mar-2022: Funding Circle partnered with Pitney Bowes, an American technology corporation. With this partnership, the companies is expected to offer consumers of the global mailing and shipping firm permit to financing arranged via the Funding Circle platform. Additionally, Pitney Bowes is expected to provide small firm term loans to its consumers via the Funding Circle platform.
- Aug-2020: Funding Circle & Santander came into a partnership with Santander, a banking services company. Through this partnership, the companies aimed to support thousands of UK companies. Additionally, The referral arrangement is expected to witness Santander proactively guide small business clients looking for a loan to Funding Circle.
- Aug-2020: Funding Circle formed a partnership with Sage, one of the world’s foremost providers of software solutions for small companies. This partnership implicates Sage in guiding their small business consumers to Funding Circle in cases where their consumers require enterprise finance. Additionally, Sage delivers a range of invaluable industry devices such as software for accounts, HR, payroll, and payments, and has over 6 million consumers across the world.
; Product Launches and Product Expansions:
- May-2022: LendingClub introduced a new enhancement to its automated loan auction platform, LCX. With this expansion, Institutional investors can now trade LendingClub loans instantly to each other on the platform, improving access to this market-leading support through an effective digital marketplace.
- May-2022: Upstart expanded its technology to more car dealerships. This expansion focused on benefiting drivers with appropriate and inadequate credit by completing a more equal playing domain for loan clearance at the dealership level.
- Jan-2022: Prosper Marketplace unveiled Prosper Card to support people get a grip on their finances no matter where they fall on the credit ranking. The prosper card provides reasonable rates, no annual charges for the first year with autopay, no-fee ATM cash advancements, no security assurance, and other bonuses.
- Dec-2021: Funding Circle launched Application Programming Interface. The new platform is expected to allow partners to natively implant Funding Circle into their website, delivering consumers with quick and seamless access to business loans. Additionally, utilizing Funding Circle’s decade of investment in its machine learning and Instant Decision technology, associates can now deliver consumers a frictionless method to apply for a loan of up to £500,000 in minutes, obtain a judgment in seconds, and have money in their account within 24 hours.
- Dec-2021: Kabbage introduced Kabbage Funding, a small enterprise line of credit to support fund small companies. The new portfolio develops Kabbage’s digital cash flow platform for small enterprises. Moreover, qualified applicants can obtain funding of around $1,000 and $150,000.
- Jun-2020: Upstart introduced its support for auto loans as part of its consumer lending platform. The new service allows banks to deliver refinance and purchase finance loans with streamlined higher clearance, digital experience, and potentially lower failure rates, all facilitated by AI.
; Acquisitions and Mergers:
- May-2022: Avant completed the acquisition of PlanetOne, a Scottsdale, Arizona-based supplier of tech sourcing solutions. With this acquisition, PlanetOne is an immediate multiplier for the individuals, partners, and vendors working with and for PlanetOne and AVANT.
- Apr-2021: Avant took over Zero Financial, a financial technology business. This acquisition is a crucial element of Avant's strategy to deliver unserved and underbanked customers with a complete ecosystem of transparent financial services and products with prominent features and rewards, in one mobile app.
; Business Expansions:
- Feb-2022: CommonBond expanded its business by establishing new Solar financing. The new business offers to deliver reasonable financing possibilities for the building of solar panels, the organization is promoting more homeowners to save funds on their monthly electricity bill and decrease carbon impression.
Scope of the Study
Market Segments Covered in the Report:
By Component
- Solution
- Loan Origination
- Loan Servicing
- Lending Analytics
- Others
- Services
- Integration & Deployment
- Support & Maintenance
- Training & Consulting
- Managed Services
By Deployment
- On-Premise
- Cloud
By End-use
- Crowdfunding
- Peer-to-Peer Lending
By Geography
- North America
- US
- Canada
- Mexico
- Rest of North America
- Europe
- Germany
- UK
- France
- Russia
- Spain
- Italy
- Rest of Europe
- Asia Pacific
- China
- Japan
- India
- South Korea
- Singapore
- Malaysia
- Rest of Asia Pacific
- LAMEA
- Brazil
- Argentina
- UAE
- Saudi Arabia
- South Africa
- Nigeria
- Rest of LAMEA
Key Market Players
List of Companies Profiled in the Report:
- Funding Circle Limited
- On Deck Capital, Inc.
- Upstart Network, Inc.
- American Express Kabbage Inc. (American Express Company)
- LendingClub Bank (LendingClub Corporation)
- Zopa Bank Limited
- CommonBond, Inc.
- Prosper Funding LLC
- Avant, LLC
- Social Finance
Unique Offerings from the Publisher
- Exhaustive coverage
- The highest number of Market tables and figures
- Subscription-based model available
- Guaranteed best price
- Assured post sales research support with 10% customization free
Table of Contents
Chapter 1. Market Scope & Methodology
Chapter 2. Market Overview
Chapter 3. Competition Analysis - Global
Chapter 4. Global Alternative Lending Platform Market by Component
Chapter 5. Global Alternative Lending Platform Market by Deployment
Chapter 6. Global Alternative Lending Platform Market by End-use
Chapter 7. Global Alternative Lending Platform Market by Region
Chapter 8. Company Profiles
Companies Mentioned
- Funding Circle Limited
- On Deck Capital, Inc.
- Upstart Network, Inc.
- American Express Kabbage Inc. (American Express Company)
- LendingClub Bank (LendingClub Corporation)
- Zopa Bank Limited
- CommonBond, Inc.
- Prosper Funding LLC
- Avant, LLC
- Social Finance
Methodology
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