Financial Technology

Alternative finance market size to grow by USD 176.15 billion from 2020 to 2025; A descriptive analysis of customer landscape, vendor assessment, and market dynamics

NEW YORK, Jan. 16, 2023 /PRNewswire/ — The global alternative finance market size is estimated to increase by USD 176.15 billion from 2020 to 2025. The market’s growth momentum will be progressing at a CAGR of 10% during the forecast period. Discover some insights on market size before buying the full report – Request a sample report

Alternative finance market – Customer Landscape

To help companies evaluate and develop growth strategies, the report outlines –

  • Key purchase criteria
  • Adoption rates
  • Adoption lifecycle
  • Drivers of price sensitivity
  • Get detailed insights into the market study. Buy the report!

Alternative finance market – Vendor Analysis

Vendor Landscape – The global alternative finance market is fragmented, with the presence of several global as well as regional vendors. The market is witnessing a significant level of competition among global and regional vendors that provide solutions as well as services for alternative finance. Global players have established themselves in the market and are offering innovative solutions as well as services to clients worldwide. These players are also focusing on expanding their customer base across the world. Hence, regional players are finding it difficult to establish themselves in the market and compete with established vendors in terms of brand and reliability.

A few prominent vendors that offer alternative finance in the market are CircleUp Network Inc.,  Crowdfunder Ltd., Fundable LLC, Funding Circle Holdings Plc, Fundrise LLC, GoFundMe Inc., Indiegogo Inc., Kickstarter PBC, LendingClub Corp., and Patreon Inc. and others.

Vendor Offerings –

  • CircleUp Network Inc. – The company offers credit loans to businesses.
  • Crowdfunder Ltd. – The company offers crowdfunding solutions to individuals and institutional investors.
  • Fundable LLC – The company offers a crowdfunding platform to its customers.
  • Funding Circle Holdings Plc – The company offers a line of solutions for alternative finance including P2P lending and crowdfunding.

Alternative finance market – Segmentation Assessment

Segment Overview
Technavio has segmented the market based on type (P2P lending, crowdfunding, and invoice trading) and geography (APAC, North America, Europe, South America, and MEA).

  • The alternative finance market share growth by the P2P lending segment will be significant during the forecast period. In this model, investors provide loans to businesses, SMEs, and startups to set up or run their operations. Many SMEs have started using P2P lending platforms over recent five years as securing loans from banks has become difficult, and overdraft limits have been reduced in several countries. In addition, the rise in the number of online consumer lending platforms and the increasing use of technology in financial transactions are driving the growth of the segment.

Geography Overview
By geography, the global alternative finance market is segmented into APAC, North America, Europe, South America, and MEA. The report provides actionable insights and estimates the contribution of all regions to the growth of the global alternative finance market.

  • APAC will account for 73% of the market growth during the forecast period. Factors such as the increasing penetration of the Internet and smartphones, the rapid growth of social media, and the increasing number of SMEs and startups are driving the growth of the alternative finance market in APAC. Also, the rising adoption of online platforms for lending and the presence of global and regional vendors are contributing to the growth of the regional market.

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Alternative finance market
Market Dynamics

Leading Drivers – 

The market is driven by better returns offered by alternative finance. Compared to fixed deposits and bonds offered by financial institutions, alternative finance provides better returns. This is due to the lower operating cost of alternative finance compared with banks and other financial institutions. Alternative finance platforms have almost no physical assets such as offices and have low human resource and operating costs, low cost of capital acquisition, and low collection and billing costs. Also, since all transactions in alternative finance take place online, investors gain better returns. Such high returns offered by alternative finance platforms are driving the growth of the market in focus.

Key Trends – 

The rapid growth of alternative finance in APAC is identified as the key trend in the market. The demand for alternative financing is increasing in APAC due to a rise in the number of startups and SMEs in the region. For instance, by the end of 2018, the number of SMEs in China was approximately 18.07 million. Similarly, as of March 2020, there were 63.3 million SMEs present across India. This rise in the number of SMEs is creating significant opportunities for vendors operating in the region. Alternative finance solutions and service providers are helping SMEs by strengthening their access to credit and equity. In addition, rising internet penetration and the increasing use of smartphones are driving the growth of the global alternative finance market.

Major challenges – 

The high risk of credit default is one of the key challenges hindering the growth of the market. Many borrowers do not qualify for loans from traditional financial institutions as the chance of defaulting is high. This discourages many financers from investing in alternative finance, which may force alternative finance providers to decline borrowers or charge a higher rate of interest. These factors are reducing the growth potential in the market.

Driver, Trend, and Challenges are the factors of market dynamics that state about consequences & sustainability of the businesses, find some insights from a sample report!

What are the key data covered in this alternative finance market report?

  • CAGR of the market during the forecast period
  • Detailed information on factors that will drive the growth of the alternative finance market between 2021 and 2025
  • Precise estimation of the size of the alternative finance market size and its contribution to the market in focus on the parent market
  • Accurate predictions about upcoming trends and changes in consumer behavior
  • Growth of the alternative finance market industry across APAC, North America, Europe, South America, and MEA
  • A thorough analysis of the market’s competitive landscape and detailed information about vendors
  • Comprehensive analysis of factors that will challenge the growth of alternative finance market vendors

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Alternative Finance Market Scope

Report Coverage

Details

Page number

117

Base year

2020

Forecast period

2021-2025

Growth momentum & CAGR

Accelerate at a CAGR of 10%

Market growth 2021-2025

USD 176.15 billion

Market structure

Fragmented

YoY growth 2022-2023 (%)

7.95

Regional analysis

APAC, North America, Europe, South America, and MEA

Performing market contribution

APAC at 73%

Key countries

China, US, UK, Germany, and Indonesia

Competitive landscape

Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks

Key companies profiled

CircleUp Network Inc.,  Crowdfunder Ltd., Fundable LLC, Funding Circle Holdings Plc, Fundrise LLC, GoFundMe Inc., Indiegogo Inc., Kickstarter PBC, LendingClub Corp., and Patreon Inc.

Market dynamics

Parent market analysis, market growth inducers and obstacles, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period.

Customization purview

If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

Customization purview

If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

Table of contents:

1 Executive Summary

2 Market Landscape

  • 2.1 Market ecosystem 
    • Exhibit 01: Parent market
  • 2.2 Market characteristics 
    • Exhibit 02: Market characteristics
  • 2.3 Value chain analysis 
    • Exhibit 03: Value chain analysis: Specialized consumer services

3 Market Sizing

  • 3.1 Market definition 
    • Exhibit 04: Offerings of vendors included in the market definition
  • 3.2 Market segment analysis 
    • Exhibit 05: Market segments
  • 3.4 Market outlook: Forecast for 2020 – 2025
    • Exhibit 06: Global – Market size and forecast 2020 – 2025 ($ billion)
    • Exhibit 07: Global market: Year-over-year growth 2020 – 2025 (%)
  • 3.5 Type of financial models in alternative finance

4 Five Forces Analysis

  • 4.1 Five forces analysis 
    • Exhibit 08: Five forces analysis 2020 & 2025
  • 4.2 Bargaining power of buyers 
    • Exhibit 09: Bargaining power of buyers
  • 4.3 Bargaining power of suppliers 
    • Exhibit 10: Bargaining power of suppliers
  • 4.4 Threat of new entrants 
    • Exhibit 11: Threat of new entrants
  • 4.5 Threat of substitutes 
    • Exhibit 12: Threat of substitutes
  • 4.6 Threat of rivalry 
    • Exhibit 13: Threat of rivalry
  • 4.7 Market condition 
    • Exhibit 14: Market condition – Five forces 2020

5 Market Segmentation by Type

  • 5.3 P2P lending – Market size and forecast 2020-2025
    • Exhibit 17: P2P lending – Market size and forecast 2020-2025 ($ billion)
    • Exhibit 18: P2P lending – Year-over-year growth 2020-2025 (%)
  • 5.4 Crowdfunding – Market size and forecast 2020-2025
    • Exhibit 19: Crowdfunding – Market size and forecast 2020-2025 ($ billion)
    • Exhibit 20: Crowdfunding – Year-over-year growth 2020-2025 (%)
  • 5.5 Invoice trading – Market size and forecast 2020-2025
    • Exhibit 21: Invoice trading – Market size and forecast 2020-2025 ($ billion)
    • Exhibit 22: Invoice trading – Year-over-year growth 2020-2025 (%)
  • 5.6 Market opportunity by Type 
    • Exhibit 23: Market opportunity by Type

6 Customer landscape

7 Geographic Landscape

  • 7.1 Geographic segmentation
  • 7.2 Geographic comparison
  • 7.3 APAC – Market size and forecast 2020-2025
  • 7.4 North America – Market size and forecast 2020-2025
  • 7.5 Europe – Market size and forecast 2020-2025
  • 7.6 South America – Market size and forecast 2020-2025
  • 7.7 MEA – Market size and forecast 2020-2025
  • 7.8 Key leading countries
  • 7.9 Market opportunity by geography

8 Drivers, Challenges, and Trends

9 Vendor Landscape

10 Vendor Analysis

  • 10.2 Market positioning of vendors
  • 10.3 CircleUp Network Inc.
  • 10.6 Funding Circle Holdings Plc

11 Appendix

  • 11.2 Currency conversion rates for US$
  • 11.3 Research methodology
  • 11.4 List of abbreviations

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