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NEW YORK, July 15, 2022 /PRNewswire/ — The Alternative Finance Market is a part of the global specialized consumer services industry. The global specialized consumer services market was valued at $4,388.46 billion in 2020. The global alternative finance market was a fragmented industry that was in a phase of innovation in 2020. By 2025, the market structure would continue to be fragmented. Its lifecycle stage would continue to be in the innovation phase. Moreover, the alternative finance market value is set to grow by USD 176.15 billionprogressing at a CAGR of 10% from 2020 to 2025, as per the latest report by Technavio.
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- One of the key factors driving the alternative finance market growth is the better returns for investors. The average yield on FDs or 10-year government bonds in developed countries such as the UK and the US is around 1%-3%, and alternative finance investment platforms such as LendingClub and Funding Circle provide returns at a theoretical average of 7%.
- Another key factor driving the alternative finance market growth is the rapid growth in APAC. For instance, the number of SMEs in China was approximately 18.07 million by the end of 2018. Similarly, according to the data published by the Ministry of Micro, Small and Medium Enterprises (MSMEs), as of March 2020there were 63.3 million (6.33 Crore) SMEs present across India.
- High risk of credit default is one of the key challenges hindering the alternative finance market growth. For instance, the default rates for LendingClub and Prosper Marketplace on loans with a payback period of three years or more average at around 10%-14%. High-risk lenders such as Bondora Capital, which provide loans to customers with very poor creditworthiness, have a credit default rate of up to 25%-30% of their overall loan volume.
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Alternative Finance Market: What is the Revenue-generating Type Segments?
- P2P Lending
- Crowdfunding
- Invoice Trading
Alternative Finance Market: Which are the Key Regions?
- APAC
- North America
- Europe
- South America
- MEA
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Companies Covered:
- CircleUp Network Inc.
- Crowdfunder Ltd.
- Fundable LLC
- Funding Circle Holdings Plc
- Fundrise LLC
- GoFundMe Inc.
- Indiegogo Inc.
- Kickstarter PBC
- LendingClub Corp.
- Patreon Inc.
The alternative finance market is fragmented, and the vendors are deploying growth strategies such as organic and inorganic strategies to compete in the market. Moreover, to make the most of the opportunities and recover from post COVID-19 impact, market vendors should focus more on the growth prospects in the fast-growing segments, while maintaining…
Full story available on Benzinga.com
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