Fin­tech fund­ing in­dus­try pro­jected to hit $291.5bn in 2021, data show

Business a.m. - - FRONT PAGE - BUSI­NESS A.M.

THE TO­TAL FIN TECH FUND ING in­dus­try has been pro­jected to grow by 9.15 per cent year on year to $291.5 bil­lion in 2020 with a rise in fund­ing trend ex­pected to con­tinue in 2021 as ag­gre­gate trans­ac­tion value of the com­bined mar­ket jumps by 25 per cent to hit $335 bil­lion, re­cent data ob­tained by Busi­ness A.M shows.

Though, tra­di­tional banks and credit houses still hold the largest mar­ket share for the con­sumer and busi­ness loans, there have been a con­sid­er­able de­mand for Fin­Tech fund­ing in re­cent years. Sim­i­larly, the year 2020 has seen a new rise in the rate of al­ter­na­tive loans with mil­lions of small busi­nesses in search of best fit of fi­nan­cial sup­port for their busi­nesses in the face of the pan­demic.

Value of loans to small and medium-sized busi­nesses to hit $291.5 bil­lion in 2021

In 2017, a re­port by Statista Dig­i­tal Mar­ket out­look re­vealed that the global Fin­Tech lend­ing in­dus­try was worth $181.2 bil­lion. At the close of 2019, the trans­ac­tion value rose to $267.1 bil­lion, indi­cat­ing a 47 per cent jump in two years. How­ever, more sta­tis­tics show the global Fin­Tech lend­ing mar­ket’s value is ex­pected to in­crease by $24.3 bil­lion by the end of 2020 to hit a to­tal of $291.4 bil­lion.

Busi­ness peer-to-peer loans, as a lead­ing seg­ment in the mar­ket, have wit­nessed a 14 per cent an­nual growth rate in 2020, with the trans­ac­tion value ris­ing from $180.8 bil­lion to $206.12 bil­lion. Also, the end of 2021 will see the cu­mu­la­tive value of al­ter­na­tive loans to small and medium-sized busi­nesses rise to over $241.5 bil­lion.

How­ever, sta­tis­tics re­vealed that the pan­demic trig­gered a slight down­siz­ing trend in the con­sumer peer-to-peer lend­ing seg­ment. The com­bined value of

loans fell by 1.2 per cent to $85.3 bil­lion in 2020. But, this fig­ure is ex­pected to rise by 8.6 per cent to $92.7 bil­lion in 2021.

Fin­tech fund­ing to rise in China but drop in the US by 15 per cent

On a re­gional ba­sis, China is the largest Fin­Tech lend­ing in­dus­try glob­ally, own­ing 86 per cent in mar­ket share. The Chi­nese mar­ket has been enor­mously af­fected by ris­ing gov­ern­ment reg­u­la­tion in re­cent years, which led to a huge drop in the num­ber of fund­ing plat­forms. On the other hand, the Statista sur­vey re­vealed the Chi­nese al­ter­na­tive lend­ing mar­ket rose by 13 per cent year-on-year to $251.87 bil­lion in trans­ac­tion value in 2020, with an ex­pec­ta­tion to hit over $290 bil­lion next year.

Fur­ther­more, the US, known as the world’s sec­ond-largest Fin­Tech lend­ing mar­ket, has wit­nessed a drop in the num­ber of al­ter­na­tive loans. In 2019, the to­tal value of the busi­ness and con­sumer peer-to-peer loans in the coun­try amounted to $32.5 bil­lion. Over the last twelve months, this fig­ure slipped 15 per cent to $27.59 bil­lion.

The United King­dom ranked as the third-largest al­ter­na­tive lend­ing mar­ket glob­ally, with $3.91 bil­lion trans­ac­tion value in 2020. This is fol­lowed by Switzer­land and Italy with $1.36 bil­lion and $731 mil­lion, re­spec­tively.

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