Alternative Lending Platform Market Analysis And Forecast To 2032: By Deployment (Cloud, On-premise), By Services (Integration & Deployment, Support & Maintenance, Training & Consulting, Managed Services), By Solution (Loan Origination, Loan Servicing, Le

Alternative Lending Platform Market Analysis And Forecast To 2032: By Deployment (Cloud, On-premise), By Services (Integration & Deployment, Support & Maintenance, Training & Consulting, Managed Services), By Solution (Loan Origination, Loan Servicing, Lending Analytics, Others), By Application (Credit Unions, Peer-to-Peer Lending, Insurance Companies, Others), And By Region

The global Alternative Lending Platform Market was valued at 2.6 billion in 2022 and it is anticipated to grow up to USD 22.2 billion by 2032, at a CAGR of 23.9% during the forecast period.

An Alternative Lending Platform is a type of financial institution that provides loans and other forms of financing to individuals and businesses. These platforms typically use online platforms and peer-to-peer lending models to connect borrowers with lenders. Alternative lending platforms typically have lower borrowing costs and faster funding timelines than traditional banks.

Global Alternative Lending Platform Market Scope and Report Structure

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Market Trends and Drivers

Increasing Adoption of Internet of Things and Blockchain-based Alternative Lending Platforms.

Alternative financial companies are increasingly adopting and implementing the Internet of Things (IoT) and blockchain-based technologies. These technologies help add advanced features such as easy accessibility and transparency to alternative funding platforms, further driving the Alternative Lending Platform Market growth. For example, digital products and solutions company Tavant Technologies has developed a blockchain-based digital solution that takes full advantage of data-driven processes in generating alternative funding lifecycles. Therefore, the increasing adoption of the Internet of Things and blockchain-based alternative lending platforms are expected to drive market growth for global industries in the coming years.

Market Restraints and Challenges

The key restraints and challenges in the alternative lending platform market include the stringent regulations, the need for a large amount of capital, and the lack of awareness among small businesses. The stringent regulations are the primary restraint for the growth of the alternative lending platform market. The need for a large amount of capital is another challenge for the market growth. The lack of awareness among small businesses is also a challenge for the market growth.

Global Alternative Lending Platform Market Segmental Overview

The report analyses the global Alternative Lending Platform Market based on Deployment, Services, Solution, End-user, and Region.

Global Alternative Lending Platform Market by Deployment

Based on the deployment, the alternative lending platform market is divided into P On-Premise, and Cloud. Of these, the on-premise segment registered significant revenue in 2022. The on-premise segment dominated the market in 2021 and contributed to a share of more than 68.0% of the global revenue. Although the lending industry is steadily adopting the cloud, many lenders still view this as a barrier since they are apprehensive about data security. They choose on-premise deployment over the cloud because they are unfamiliar with the technology and concerned about losing control over their data. The data kept with lending institutions are sensitive and can be stolen or misused. As a result, businesses are still preferring on-premise deployment.

The cloud segment is anticipated to grow at the fastest CAGR during the forecast period. In addition to offering a comprehensive view of client relationships to provide a better customer experience, cloud technology also reduces overall costs and improves operational efficiency. Furthermore, adopting cloud-based deployment enables remote access, which increases business flexibility. Several players are deploying cloud-based models to gain a competitive edge over their peers.

Global Alternative Lending Platform Market by Services

By services, the industry is bifurcated into Integration & Deployment, Support & Maintenance, Training & Consulting, and Managed Services. In 2022, the integration & deployment segment held the largest revenue share of more than 42.0%. The growing prevalence of alternative lending and the rising awareness of digital means of financing are propelling the segment’s growth. Continuous improvement in customer acquisition and the growing demand for matching the right lender with the borrowers are responsible for increasing the need for these services. Moreover, the flexibility to pick the deployment model as per various attributes such as security, budget, organizational needs, and infrastructure capability is also an important factor in boosting the growth of the segment.

The managed services segment is expected to witness the fastest growth during the forecast period. Managed services can help the institutions to cope with the rapidly changing industry trends and technological advancements. Businesses cannot maintain their line of operations while keeping up with the most recent IT trends. With the help of managed services, businesses are empowered to focus on what they do best. Additionally, the technology partners support these efforts with strong IT support; hence the segment is growing significantly.

Global Alternative Lending Platform Market by Solution

Based on solution, the industry is categorized into Loan Origination, Loan Servicing, Lending Analytics, and Others. The loan origination segment accounted for the largest revenue share of more than 28.5% in 2022. The dominance is attributable to the growing popularity of alternative lending platforms as many individuals, especially students, are applying for personal and education loans. Several non-bank institutions such as insurance companies and fund managers previously invested in securitized products are exploring the growth potential. They offer credit to startups and SMEs in their developing phase.

The lending analytics segment is anticipated to witness significant growth during the forecast period. The growth is driven by the growing adoption of tools such as data analytics and predictive analytics in financing activities to reduce operational costs and maximize profitability. Improved customer acquisition and enhanced consumer experience contribute to the growth. Moreover, the efficient lifecycle management of the loans is one of the principal elements responsible for the growth of the segment.

Global Alternative Lending Platform Market by End-user

Based on end-user, the alternative lending platform market is divided into Credit Unions, Peer-to-Peer Lending, Insurance Companies, and Others. The peer-to-peer lending segment is anticipated to grow at a promising CAGR during the forecast period. The proliferation of smartphones and internet penetration is driving the segments’ growth as P2P lending platforms are run primarily via the internet using laptops or smartphones. In addition, the advantages associated with it, such as relatively low operational cost compared to legacy platforms, fuel the segments' growth. Moreover, the convenience of getting a loan and easy accessibility also bodes well for growth.

Geographical Analysis of Global Alternative Lending Platform Market

Region-wise, it is studied across North America, Europe, Asia Pacific, and the Rest of the World. North America dominated the Alternative Lending Platform Market growth, recording the highest CAGR during the forecast period. According to the Global Entrepreneurship Monitor, U.S. start-ups make up more than 17.4% of the country's total population. Thus, it represents an excellent opportunity for cloud lending in the region. Moreover, this region's collaboration between banks and market lenders is rapidly increasing. These factors are expected to drive the growth of the Alternative Lending Platform Market during the projected period in this region.

Asia Pacific is expected to grow at the highest CAGR during the forecast period. The growth of the regional market can be attributed to the growing awareness in countries such as China, India, and Japan, about the benefits offered by alternative lending platforms. The aggressive efforts being pursued by various organizations across the Asia Pacific to promote the utilization of alternative lending platforms are also expected to contribute to the growth of the regional market. For instance, in June 2022, a Singapore-based startup named Helicap raised USD 6.94 million in funding, and it has developed a technology for crunching data points of loans which can help in evaluating the creditworthiness of over 500 lenders across South East Asia and Oceania.

Major Players in the Global Alternative Lending Platform Market

Market players are focusing on strategic collaborations to enhance their product offerings. Some prominent participants in the global alternative lending platform market include Funding Circle, On Deck Capital, Kabbage, Social Finance, Inc., Prosper Funding LLC, Avant, LLC, Zopa Bank Limited, LendingClub Bank, Upstart Network, Inc., and CommonBond, Inc. among others.

COVID-19 Impact

Throughout the projected period, the COVID-19 pandemic is anticipated to have a significant impact on the growth of the industry. The alternative lending platforms witnessed a substantial increase in users as many people suffered financial losses owing to the outbreak. Numerous individuals across the globe have applied for loans using alternative lending platforms due to various benefits it offers, such as quick access and easy approvals. Moreover, to keep their business running in troubled times, SMEs are also inclined toward alternative lending platforms.

Recent Developments

In June 2022, StellarFi, the U.S.-based public benefit corporation, launched its fintech platform, which is expected to help its users build their credit scores by paying their liabilities timely.

In June 2022, a Singapore-based startup named Helicap raised USD 6.94 million in funding, and it has developed a technology for crunching data points of loans which can help in evaluating the creditworthiness of over 500 lenders across South East Asia and Oceania.

In June 2022, Blueprint Capital Advisors, an alternative credit investment firm, struck a deal with T30 Capital LLC to scale the real estate lending platform.

In May 2022, GoFundMe announced the acquisition of non-profit funding site Classy. Classy has been reported to continue and operate as a wholly-owned subsidiary of GoFundMe. The investment aims to create new opportunities to serve the nearly $ 500 billion philanthropic market as GoFundMe strives to be the most helpful place on the planet.

In June 2021, MarketFinance Limited, the U.K.-based business finance lender, will embed the suite of its lending products inside the Funding Options application. This partnership is aimed to create seamless and quick accessibility to finance operations.



Frequently Asked Questions

Q1. How big is the Alternative Lending Platform market?

Ans. The global Alternative Lending Platform Market was valued at 2.6 billion in 2022 and it is anticipated to grow up to USD 22.2 billion by 2032, at a CAGR of 23.9% during the forecast period.

Q2. What is the Alternative Lending Platform Market growth rate?

Ans. The growth rate of the Alternative Lending Platform Market is 23.9%

Q3. Which region holds a major market share for the market?

Ans. North America holds a major market share of the Alternative Lending Platform Market in 2021.

Q4. Which segment accounted for the largest Alternative Lending Platform Market share?

Ans. By end-user, the Peer-to-Peer Lending segment accounted for the largest Alternative Lending Platform Market share.

Q5. Who are the key players in the Alternative Lending Platform market?

Ans. The global Alternative Lending Platform Market report includes players such as  Funding Circle, On Deck Capital, Kabbage, Social Finance, Inc., Prosper Funding LLC, Avant, LLC, Zopa Bank Limited, LendingClub Bank, Upstart Network, Inc., and CommonBond, Inc. among others.

Q6. What are the factors driving the Alternative Lending Platform Market growth?

Ans. The major factors driving the growth of the market are the faster credit approval processes and ease of accessing the online platforms.

Q7. What are the key growth strategies of Alternative Lending Platform Market players?

Ans. The key growth strategies of Alternative Lending Platform Market players are product launch and product approval.

Q8. Which region will provide more business opportunities for the Alternative Lending Platform Market during the forecast period?

Ans. The Asia-Pacific region will provide more business opportunities for the Alternative Lending Platform Market during the forecast period.