Lending Market Opportunities and Strategies to 2033

This report describes and explains the lending market and covers 2018-2023, termed the historic period, and 2023-2028, 2033F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global lending market reached a value of nearly $10.4 trillion in 2023, having grown at a compound annual growth rate (CAGR) of 6.76% since 2018. The market is expected to grow from $10.4 trillion in 2023 to $14.9 trillion in 2028 at a rate of 7.49%. The market is then expected to grow at a CAGR of 7.06% from 2028 and reach $21 trillion in 2033.

Growth in the historic period resulted from the increasing digitalization, rise in the number of SMEs, rise in disposable income, shift towards online banking services and increased number of fintech companies. Factors that negatively affected growth in the historic period include regulatory pressures.

Going forward, the increasing internet penetration, strong economic growth in emerging markets, rise in construction activity, growing number of higher education students, favorable government support and rising urbanization will drive the market. Factors that could hinder the growth of the lending market in the future include interest rate challenges.

The lending market is segmented by type into corporate lending, household lending and government lending. The household lending market was the largest segment of the lending market segmented by type, accounting for 43.81% or $4.6 trillion of the total in 2023. Going forward, the household lending segment is expected to be the fastest growing segment in the lending market segmented by type, at a CAGR of 10.02% during 2023-2028.

The lending market is segmented by interest rate into fixed rate and floating rate. The fixed rate market was the largest segment of the lending market segmented by interest rate, accounting for 57.23% or $6 trillion of the total in 2023. Going forward, the floating rate segment is expected to be the fastest growing segment in the lending market segmented by interest rate, at a CAGR of 7.93% during 2023-2028.

The lending market is segmented by lending channel into offline and online. The offline market was the largest segment of the lending market segmented by lending channel, accounting for 51.83% or $5.4 trillion of the total in 2023. Going forward, the online segment is expected to be the fastest growing segment in the lending market segmented by lending channel, at a CAGR of 8.04% during 2023-2028.

Western Europe was the largest region in the lending market, accounting for 38.49% or $4 trillion of the total in 2023. It was followed by North America, Asia-Pacific and then the other regions. Going forward, the fastest-growing regions in the lending market will be South America and Africa, where growth will be at CAGRs of 12.26% and 10.34% respectively. These will be followed by North America and Asia-Pacific, where the markets are expected to grow at CAGRs of 7.95% and 7.63% respectively.

The global lending market is fairly fragmented, with a large number of small players operating in the market. The top ten competitors in the market made up to 11.53% of the total market in 2023. Industrial and Commercial Bank Of China Ltd. (IDCBY) was the largest competitor with a 1.91% share of the market, followed by Agricultural Bank of China with 1.66%, JPMorgan Chase & Co. (JPM) with 1.64%, Citi Group Inc. with 1.28%, Bank of America (BoA) Corp. with 1.25%, HSBC Holdings plc with 0.97%, China Construction Bank Corporation with 0.84%, BNP Paribas with 0.83%, Goldman Sachs Group Inc. with 0.66% and Wells Fargo & Co. with 0.50%.

The top opportunities in the lending market segmented by type will arise in the household lending segment, which will gain $2.8 trillion of global annual sales by 2028. The top opportunities in the lending market by interest rate will arise in the fixed rate segment, which will gain $2.5 trillion of global annual sales by 2028. The top opportunities in the lending market by lending channel will arise in the online segment, which will gain $2.4 trillion of global annual sales by 2028. The lending market size will gain the most in the USA at $1.3 trillion.

Market-trend-based strategies for the lending market include focus on use of blockchain technology to improve transparency and security in lending transactions, adopting alternative credit data enhancing inclusivity and risk management in lending, introduction of advanced platforms for seamless credit transactions, integrating artificial intelligence (AI) to enhance lending platforms and strategic partnerships and collaborations among market players.

Player-adopted strategies in the lending market include focus on expanding global presence by exploring strategic collaborations with major financial institution, expanding community-based banking services and providing financial support to underserved neighborhoods through localized branches and targeted homebuyer grants, expanding private lending capabilities by leveraging strategic partnerships and offering diverse credit solutions and streamline the car shopping experience by offering a credit-score-friendly auto prequalification service, empowering customers with personalized financing options.

To take advantage of the opportunities, the analyst recommends the lending companies to focus on blockchain technology to enhance lending efficiency, focus on leveraging alternative credit data for competitive advantage, focus on developing advanced platforms for seamless credit transactions, focus on integrating artificial intelligence in lending processes, focus on expanding household lending services, focus on floating rate lending solutions, focus on expanding online lending services, expand in emerging markets, focus on strategic partnerships to enhance market reach, focus on developing competitive pricing strategies, focus on targeted digital marketing campaigns, focus on community engagement initiatives and focus on strengthening relationships with lending providers.