Global Consumer Lending Market Research Report 2023-Competitive Analysis, Status and Outlook by Type, Downstream Industry, and Geography, Forecast to 2029

Global Consumer Lending Market Research Report 2023-Competitive Analysis, Status and Outlook by Type, Downstream Industry, and Geography, Forecast to 2029

Consumer lending provides financing for personal, family, or household purposes. The loans can come from a variety of places, including financial institutions or lending platforms. This report mainly studies global consumer lending market.

Market Overview:

The latest research study on the global Consumer Lending market finds that the global Consumer Lending market reached a value of USD 1057936.12 million in 2022. It’s expected that the market will achieve USD 1472482.89 million by 2028, exhibiting a CAGR of 5.67% during the forecast period.

Influence of COVID-19 Outbreak on Consumer Lending Industry Development

The impact of COVID-19 on the global economy. The toll continues to rise. Many more have suffered a serious illness. Close to 90 million people are expected to fall into extreme deprivation this year. Compared with the IMF report released in June, the global economic contraction in 2020 will not be as severe as previously predicted. This revision reflects a better-than-expected economic recovery in the second quarter. Global growth is projected at 5.2 percent in 2021, a little lower than in the June 2020 WEO Update, reflecting the more moderate downturn projected for 2020 and consistent with expectations of persistent social distancing. This is the worst global recession in decades, despite the huge efforts of governments with the support of fiscal and monetary policies to deal with the economic downturn. But from a long-term perspective, it is expected that the severe recession caused by the pandemic will cause a prolonged economic depression by reducing investment. Should COVID-19 outbreaks persist, should restrictions on movement be extended or reintroduced, or should disruptions to economic activity be prolonged, the recession could be deeper. Businesses might find it hard to service debt, heightened risk aversion could lead to climbing borrowing costs, and bankruptcies and defaults could result in financial crises in many countries. Under such unfavorable circumstances, there will still be a possibility of a global decline in 2021.

Before the outbreak of COVID-19, global consumer finance has been developing rapidly. Since the outbreak in January 2020, due to restrictions on travel and resumption of production, catering, transportation, entertainment and tourism industries have been significantly impacted, and the scale of short-term Consumer Lending has declined rapidly.

A few years before the outbreak, with the encouragement of internet capital, lenders in the Consumer Lending market gradually tended to take younger and relatively unstable Generation Z young people as their business expansion targets. Internet capital, in particular, straightforwardly preaches the concepts of long tail customers and sub-optimal customers and guides credit institutions to lower the loan threshold and sink the customer base.

The outbreak of the epidemic led to the closure of the city, postponement of resumption of work, self-isolation, underemployment, etc., which made the stability disadvantages of employees exposed rapidly, and the income dropped sharply or even reached zero. This kind of low-and middle-income group, once called sub-optimal, has a tight capital chain, and the overdue rate of Consumer Lending, which is mainly aimed at them, has accelerated, and the risk has increased. However, considering the billing cycle, the risk may occur behind schedule.

The impact of the epidemic on Consumer Lending Companies is directly reflected in three aspects: scale, risk and profit. First, customers' willingness and ability to consume have suffered heavy losses, and customers' short-term consumption demand has declined, which will inevitably affect the scale of Consumer Lending. Second, the decline in customers' income sources and active repayment ability will lead to increased risk exposure of financial institutions, increased difficulty in asset management and control, and further pressure on asset quality. Third, in order to resist the risk of bad debts, financial institutions take the initiative to increase the provision, which will affect the profit increase.

To cope with the impact of the epidemic on the Consumer Lending industry, industry companies should increase their ability to control the risks of Consumer Lending business. With the alleviation of epidemic situation, economic recovery and industry transformation, the profitability of Consumer Lending Company is expected to recover.

SWOT Analysis

Strength

With the development of economy and society and the improvement of people's living standards, there is still much room for improvement in household consumption. Consumer Lending is based on consumer credit and distributed to consumers individually. It has the characteristics of wide consumption, high loan amount and long loan period.
With the increasingly fierce competition in the financial industry, in order to seek development, commercial banks need to explore new business areas. Consumer Lending has high risks, high returns, periodicity (long-term) and insensitivity to interest rates. Market profit drives new participants to join the market and promotes the development of the industry.
The biggest advantage of Consumer Lending is the financial flexibility it brings. The flexibility provided by Consumer Lending also allows consumers to make more timely investments.

Weakness

Credit risk: Credit risk refers to a kind of financial risk that a loan user suffers losses because he cannot repay the loan on schedule as agreed. Some Consumer Lending departments issue unsecured loans, which also increases the risk of bad debts. The increase of financial fraud has threatened the Consumer Lending market. Some criminals in the market began to keep an eye on the financial industry, and they used trading loopholes and lenders' psychology to cheat, which caused risks to the normal operation of Consumer Lending.
Obtaining credit makes it easier to pay basic needs and pay emergency expenses, but it also simplifies the process of buying expensive products that you might want but don't need. This will cause people's excessive consumption. Psychologists have discovered that people often use credit unwisely due to natural human impulses. At the same time, the interest on consumer loans is usually very high. Excessive consumption will cause consumers to fall into the crisis of high-interest debt, which may cause them heavy losses in the long run.

Opportunities

With the emergence of more and more credit reporting agencies, banks and financial institutions can learn about the credit status of borrowers at a lower cost and ensure the safety of loans.
In order to avoid the impact of the expansion of lending, the state is willing to make use of Consumer Lending. The rapid development of Consumer Lending has played an important role in marketing products and promoting production development. In addition, at the national level, increasing financial support for expanding domestic demand and promoting consumption is conducive to promoting steady and rapid economic growth and sustainable development.

Threat

Unclear credit responsibility system: the credit responsibility system of Consumer Lending in some areas is unclear, and the credit personnel are not very concerned about the quality of loans, and even some credit personnel grant loans for personal gain; In some areas, the construction of electronic credit is lagging behind, the service mode is backward and the efficiency is low, which may lead to an increase in the operating cost of Consumer Lending institutions.
With the development of the industry, more and more companies have entered the Consumer Lending market, and the competition in the industry has intensified. Top Consumer Lending has significantly increased its scale and profit, greatly increased the number of customers, and continuously improved its market penetration rate. In addition, the scale and profit of some companies have both declined, and its development ideas are unclear, thus worrying its exhibition capacity.

Region Overview:

North America had the highest growth rate of all regions

Company Overview:

The top three companies are JPMorgan Chase & Co., Industrial and Commercial Bank of China, China Construction Bank. with a revenue market share of 5.17%, 5.14%, and 4.23% in 2020.

Segmentation Overview:

The Credit Card segment by type showed a value growth of 13.66% in 2021.

Application Overview:

By application, the Household Use segment occupied the biggest share from 2017 to 2022.

Key Companies in the global Consumer Lending market covered in Chapter 3:

Citigroup, Inc.
Mitsubishi UFJ Financial
Bank of America Corporation
Al Rajhi Bank
SABB (Alawwal)
BNP Paribas
JPMorgan Chase & Co.
HSBC Holdings plc
Riyad Bank
Barclays
American Express Company
Arab National Bank
China Construction Bank
Industrial and Commercial Bank of China
Wells Fargo & Company
Saudi Investment Bank
Deutsche Bank
Saudi National Bank

In Chapter 4 and Chapter 14.2, on the basis of types, the Consumer Lending market from 2018 to 2029 is primarily split into:

Personal Loans
Credit Card
Auto Lease
Home/ Mortgage Loans
Others

In Chapter 5 and Chapter 14.3, on the basis of Downstream Industry, the Consumer Lending market from 2018 to 2029 covers:

Individual Use
Household Use

Geographically, the detailed analysis of consumption, revenue, market share and growth rate, historic and forecast (2018-2029) of the following regions are covered in Chapter 8 to Chapter 14:

North America (United States, Canada)
Europe (Germany, UK, France, Italy, Spain, Russia, Netherlands, Turkey, Switzerland, Sweden)
Asia Pacific (China, Japan, South Korea, Australia, India, Indonesia, Philippines, Malaysia)
Latin America (Brazil, Mexico, Argentina)
Middle East & Africa (Saudi Arabia, UAE, Egypt, South Africa)