Canada Alternative Lending Market Business and Investment Opportunities Databook – 75+ KPIs on Alternative Lending Market Size, By End User, By Finance Model, By Payment Instrument, By Loan Type and Demographics - Q2 2024 Update
According to PayNXT360, the alternative lending in the country is expected to grow by 26.0% on an annual basis to reach US$2,179.3 million in 2024.
Medium to long term growth story of alternative lending in Canada remains strong. Alternative lending adoption is expected to grow steadily over the forecast period, recording a CAGR of 17.9% during 2024-2028. The alternative lending market in the country will increase from US$1,729.9 million in 2023 to reach US$4,208.7 million by 2028.
The Canadian alternative lending sector is set for continued growth, driven by increased demand, innovative product offerings, strategic partnerships, and supportive regulatory changes, all contributing to enhanced access to credit and competition in the market.
Growth in the Alternative Lending Sector
Alternative lending in Canada has seen a mix of trends. While the largest alternative lenders experienced two consecutive quarters of asset decreases under management, the alternative lending segment continues to grow and fill gaps left by traditional lenders.
Alternative lenders in Canada can benefit from increased demand for debt capital. Private lenders can offer flexible debt capital to borrowers facing limited financing options from banks.
Key Developments in the Alternative Lending Sector
Product Launches and Innovations
• Fig Financial's Digital Personal Loan Service: Fig Financial has introduced a fully digital platform for personal loans, allowing Canadians to apply and receive approvals in under ten minutes. This service aims to simplify the borrowing process and provide an alternative to traditional banks, especially for those facing financial challenges due to inflation and job insecurity.
• New Offerings from Various Fintechs: Several fintech companies have expanded their services, focusing on enhancing customer experience and accessibility. These innovations often include online platforms that streamline the application process and offer competitive rates compared to traditional lenders, catering to a growing demand for flexible lending solutions in the current economic climate.
Strategic Partnerships
• Canadian Lenders Association (CLA) and The Credit Association of Greater Toronto (CAGT): This collaboration aimed to support the Disruption Conference held in June 2024, focusing on innovation and excellence in the credit and financial industry. The partnership highlights a commitment to fostering dialogue and collaboration among industry stakeholders to enhance the alternative lending landscape in Canada.
• Trust Science and Open Banking Initiatives: Trust Science has been actively involved in promoting open banking, which allows for more secure data sharing between consumers and lenders. This initiative is expected to improve access to credit for underserved borrowers and is supported by proposed changes in the Canadian federal budget aimed at enhancing consumer-driven banking solutions.
Mergers and Acquisitions
On March 26, 2024, Fairstone Bank and Home Trust Company announced a merger to create the leading alternative lender in Canada, serving over 2 million customers through more than 250 branches nationwide. The combined entity will offer a diverse range of financial products, enhancing competition and access to financial services for historically underserved populations in Canada.
Regulatory Changes
Key regulatory and government policy developments in the Canadian alternative lending sector include:
• Criminal Interest Rate Reduction: The Canadian government has lowered the criminal interest rate from approximately 48% APR to 35% APR, aimed at combating predatory lending practices. This change, part of the 2024 federal budget, also introduces stricter regulations for payday loans, capping the maximum cost of borrowing at $14 per $100 borrowed, designed to protect vulnerable consumers from high-cost loans.
• Open Banking Initiatives: The 2024 federal budget proposed advancements in open banking, allowing consumers to share their banking data more securely with lenders. This initiative is expected to enhance consumer-driven banking practices, improve access to credit for underserved populations, and foster competition among lenders by enabling third-party financial service providers to access customer data through secure APIs.
This report provides a detailed data-centric analysis of the Alternative Lending industry, covering market opportunities and risks across a range of industry categories. With over 50 KPIs at the country level, this report provides a comprehensive understanding of Alternative Lending market dynamics, market size and forecast, and market share statistics.
It breaks down market opportunity by type of payment instrument, loan types, and consumer behavior. In addition, it provides a snapshot of marketing objective and industry spend dynamics in Canada. KPIs in both value and share term help in getting in-depth understanding of end market dynamics.
PayNXT360’s research methodology is based on industry best practices. Its unbiased analysis leverages a proprietary analytics platform to offer a detailed view on emerging business and investment market opportunities.
ScopeThis report provides in-depth data-centric analysis of Alternative Lending industry in Canada through 125 tables and 150 charts. Below is a summary of key market segments:
Canada Economic Indicators
• Gross Domestic Product at Current Prices
• Population
• Unbanked Population
• Unemployment Rate
• Loan Default Rate
Canada Alternative Lending Market Size and Forecast
• Transaction Value
• Average Transaction Value
• Transaction Volume
Canada Alternative Lending Market Size and Forecast by End User
• End User - Business
• End User - Consumer
Canada Alternative Lending Market Size and Forecast by Finance Models
• P2P Marketplace Consumer Lending
• P2P Marketplace Business Lending
• P2P Marketplace Property Lending
• Balance Sheet Consumer Lending
• Balance Sheet Business Lending
• Balance Sheet Property Lending
• Invoice Trading
• Debt Based Securities
• Equity Based Crowd Funding
• Real Estate Crowd funding
Canada Alternative Lending Market Size and Forecast by Payment Instrument - Transaction Value, Volume and Average Value
• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money
Canada Alternative Lending Market Size and Forecast by Payment Instrument to Model
• Alternative Lending Market Size and Forecast by Payment Instrument to P2P Marketplace Consumer Lending
• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money
• Alternative Lending Market Size and Forecast by Payment Instrument to P2P Marketplace Business Lending
• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money
• Alternative Lending Market Size and Forecast by Payment Instrument to P2P Marketplace Property Lending
• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money
• Alternative Lending Market Size and Forecast by Payment Instrument to Balance Sheet Consumer Lending
• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money
• Alternative Lending Market Size and Forecast by Payment Instrument to Balance Sheet Business Lending
• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money
• Alternative Lending Market Size and Forecast by Payment Instrument to Balance Sheet Property Lending
• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money
• Alternative Lending Market Size and Forecast by Payment Instrument to Invoice Trading
• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money
• Alternative Lending Market Size and Forecast by Payment Instrument to Debt Based Securities
• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money
• Alternative Lending Market Size and Forecast by Payment Instrument to Equity Based Crowd Funding
• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money
• Alternative Lending Market Size and Forecast by Payment Instrument to Real Estate Crowd funding
• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money
Canada Alternative Lending Market Size and Forecast by Loan Types
• B2C Loans
• Personal Loan
• Payroll Advance
• Home Improvement
• Education/Student Loans
• Point of Sale
• Auto Loans
• Medical Loans
• B2B Loans
• Lines of Credit
• Merchant Cash Advance
• Invoice Factoring
• Revenue Financing
Canada Alternative Lending Analysis by Consumer Attitude and Behaviour
• By Age
• By Income
• Gender
Reasons to buy• Gain a thorough understanding of the Alternative Lending market dynamics: Market opportunities, significant trends, and forecasting (2019 – 2028) are listed. To stay ahead of the curve, comprehend market trends using important KPIs like Value and Share.
• Insights by Industry: Evaluate new opportunities across multiple industries, and obtain market dynamics by industry in order to swiftly catch up with the latest and upcoming developments in Alternative Lending markets.
• Market-specific strategies: With our unique blend of quantitative forecasting and cutting-edge insights, we can identify growth sectors that are focused on particular opportunities and analyse market-specific risks as well as significant trends in the Alternative Lending industry.
• Through industry intelligence, forward-looking research of Alternative Lending market spend, and key opportunities in Canada, develop proactive and profitable company plans.