Microlending Market Report 2025

The microlending market size has grown rapidly in recent years. It will grow from $214.08 billion in 2024 to $241.99 billion in 2025 at a compound annual growth rate (CAGR) of 13%. The growth in the historic period can be attributed to financial inclusion initiatives, entrepreneurship and small businesses, poverty alleviation programs, community development, women's empowerment.

The microlending market size is expected to see rapid growth in the next few years. It will grow to $390.38 billion in 2029 at a compound annual growth rate (CAGR) of 12.7%. The growth in the forecast period can be attributed to digital financial services adoption, impact investing and social finance, emergence of fintech solutions, climate-smart lending, government support programs. Major trends in the forecast period include use of alternative data for credit assessment, employment of robotic process automation (RPA), focus on financial inclusion and rural microlending, flexible repayment models and microfinance products, regulatory framework development.

The escalating demand for micro-lending among various end-users, encompassing micro-enterprises and small enterprises, is set to drive the growth of the microlending market in the future. These small and medium-sized enterprises, characterized by limited personnel and revenue thresholds, benefit significantly from micro-lending, which empowers them with small-dollar loans, facilitating their business expansion. For instance, according to estimations by the World Bank and The International Finance Corporation (IFC), around 65 million firms, constituting 40% of formal micro, small, and medium enterprises (MSMEs) in developing countries, require approximately $5.2 trillion annually. This financial need amounts to 1.4 times the current global level of MSME lending. Additionally, initiatives such as the MSME Growth, Innovation, and Inclusive Finance Project in India aim to enhance finance accessibility for MSMEs, targeting a lending provision of $1.5 billion to startups by 2025. Consequently, the burgeoning demand for micro-lending among micro-enterprises and small enterprises is a pivotal driver behind the growth of the microlending market.

The surge in smartphone adoption is expected to significantly drive the growth of the microlending market in the foreseeable future. Smartphones, serving as versatile mobile communication devices merging the functionalities of a phone with those of a handheld computer, play a crucial role in expanding access to microlending services. They facilitate broader outreach to individuals in remote or underserved areas where traditional banking infrastructure may be scarce. For example, based on a report by Uswitch Limited in February 2023, there were 71.8 million active mobile connections in 2022, marking a 3.8% increase from 2021. Projections indicate that by 2025, out of the 68.3 million people in the UK, 95% will possess smartphones. Consequently, the escalating adoption of smartphones stands as a pivotal driver fueling the expansion of the microlending market.

Leading companies in the microlending market are prioritizing the adoption of new technologies, such as digital payment ecosystems, to enhance accessibility and efficiency in financial transactions. These innovations aim to streamline loan disbursement processes, improve customer experiences, and promote financial inclusion for underserved populations. Digital payment ecosystems consist of interconnected networks that facilitate electronic transactions across various platforms and technologies, allowing consumers and businesses to make payments seamlessly. For example, in April 2024, IDB Group, a US-based financial services company, launched FINLAC. This initiative is designed to ensure that marginalized groups, including rural communities, indigenous peoples, Afro-descendant populations, women, migrants, older adults, and micro and small businesses, can access essential financial services.

Key companies in the microlending market are innovating by developing products such as online platforms to reach broader customer bases, drive sales, and increase revenue. An online platform refers to a digital space accessible via the internet that facilitates the exchange of information, services, or products between users or between users and the platform itself. For instance, in June 2023, TMEDE, a microlending institution based in Greece, introduced the Microlending Platform. This platform, accessible through mobile or web applications, enables users to effortlessly apply for loans directly from their mobile devices or PCs with minimal effort. Setting itself apart with swift processing, approvals, and disbursements, TMEDE Microfinance Solutions ensures loans up to 25,000 euros are delivered within 24 hours. This unique feature caters to various financial needs, including investment requirements, working capital, or settling outstanding debts, offering unparalleled speed and convenience.

In August 2022, Umba Digital Bank, a bank based in Africa, acquired Daraja Microfinance Bank for an undisclosed sum. This acquisition marks a significant expansion of the microfinance banking industry overseen by the central bank of Kenya, serving both Kenya and the larger region. The investment from Umba is expected to fortify Daraja MFB’s portfolio. Daraja Microfinance Bank, headquartered in Kenya, operates primarily in microlending services.

Major companies operating in the microlending market include ICICI Bank Ltd., Bajaj Finserv Ltd., HDB Financial Services Ltd., Bandhan Bank Ltd., LendingClub Corporation, Faulu Microfinance Bank Limited, MicroVest LLC, Kiva Microfunds, Fusion Micro Finance Ltd., Accion International, Equitas Small Finance Bank Ltd., ESAF Small Finance Bank, Fincare Small Finance Bank Ltd., Ujjivan Small Finance Bank Ltd., Oakam Ltd., Small Industries Development Bank of India, One Acre Fund, FINCA International Impact Investments, Fonds National de Coopératives de Développement Economique et Sociale Agricole, Gray Ghost Ventures LLC, Elevar Equity LLC, Incofin Investment Management plc, ResponsAbility Investments AG, ImpactAssets Fund.

Asia-Pacific was the largest region in the microlending market in 2024. The regions covered in the microlending market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the microlending market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Microlending, a form of microfinance, provides small loans to support business expansion for enterprises. Microlending is advantageous because it allows borrowers without sufficient assets for collateral or those unwilling to risk their assets to access loans.

Microlending services are provided by banks, microfinance institutes (MFIs), non-banking financial institutions (NBFCs), and other providers. Banks are regulated financial institutions that operate at the federal or state level. Microfinance is often used by borrowers with poor credit or those seeking smaller loans than traditional banks offer. The end-users of microlending include small enterprises, micro-enterprises, solo entrepreneurs, and the self-employed.

The microlending market research report is one of a series of new reports that provides microlending market statistics, including microlending industry global market size, regional shares, competitors with a microlending market share, detailed microlending market segments, market trends, and opportunities, and any further data you may need to thrive in the microlending industry. This microlending market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The microlending market includes revenues earned by entities by providing loans and funds through group lending and individual lending. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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