By Kayode Tokede
Despite the economic dislocation wrought by the Coronavirus outbreak, the Fintech lending market is projected to reach $291.4 billion this year following the by 9.1 per cent year on year steady growth that shows its appeal has dwarfed the traditional banking services.
Indication to this came from data by AksjeBloggen which also noted that the rising trend of the global fintech market is forecast to continue in the following years, with the market reaching $396.8bn value by 2024.
Fintech loans are offered through lending platforms, which removed the banks from the equation, connected lenders directly with borrowers, and brought many advantages for both sides.
The sophisticated computer algorithms make lending decisions in minutes instead of days, and borrowers are offered at lower rates. At the same time, compared to traditional banking services, fintech lending brought higher return rates to investors.
In three years, the value of the market has risen 60 per cent as Statista Alternative Lending Survey shows that as of 2017, the global fintech lending industry was worth $181.2bn. Over the next two years, the transaction value rose to $267.1bn, representing a 47 percent increase. Statistics indicate that in the last twelve months, the market value of the global fintech lending industry increased by $24.3bn, reaching $291.4bn value this year.
In comparison, before the coronavirus outbreak, the transaction value of all fintech loans was forecast to reach $312.6bn value in 2020, or 7 percent more compared to the post-COVID-19 data.
Business peer-to-peer loans represent the most significant part of the fintech lending market with a $206.1billion transaction value in 2020. In the next four years, the number of loans to small and medium-sized companies is expected to continue rising and touch $297.6billion value.
Consumer peer-to-peer loans are forecast to reach $85.3billion in transaction value this year, or 2.4 times less than the business segment. By the end of 2024, this value is forecast to rise to $99.2billion.
Analyzed by countries, China represents the leading Fintech lending industry in the world, set to reach $251.8billion transaction value this year.
With a $27.5billion market value or nine times less than leading China, the United States ranked as the second-largest fintech industry globally. The United Kingdom and Switzerland follow with $3.9billion and $1.3billion, respectively.
Statistics also revealed that the following years are set to witness a surge in the number of fintech loans. In 2017, there were over 56 million successfully funded peer-to-peer loans in both business and consumer segments. In the last three years, this number grew by 30 per cent reaching 72.8 million in 2020.