The Global Digital Lending Market is estimated to account for US$ 334.7 Mn in terms of value by the end of 2021. The digital lending market is a new method of offering loans that can be easily processed via the internet or smart devices. This process eliminates the need for physical visits to banks and the associated costs. A digital lending platform allows banks to automate every aspect of the loan process. This improves the customer experience and reduces the overhead by thirty to fifty percent. Further, it improves the relationship between the lender and the borrower. Moreover, it eliminates human error and guarantees great consistency in lending decisions.
Global Digital Lending Market: Drivers
Rise in digitalization and proliferation of smartphones around the world, is expected to augment growth of the global digital lending market over the forecast period. The rate of smartphone adoption across the globe is significant. This is further leading to higher demand for digital lending solutions for rapid and uncomplicated loan processing from any location. In order to cater this consumer demand providers of digital lending platform are forced to improve their offerings in order to offer enhanced customer experience. Furthermore, digitalization leads to automation of processes and minimizing cost of lending process, and decreased the access time for consumers. Thus, these factors are likely to fuel growth of the market in the near future.
Global Digital Lending Market: Opportunities
Emergence of COVID-19 pandemic is expected create lucrative environment for growth opportunities in the global digital lending market over the forecast period. Digital lending sector especially among SMEs is expected to find several growth opportunities due to rise in adoption and growth. SMEs are globally facing challenges for fund raising to during the pandemic to keep their business operating, which is driving the demand for digital lending For instance, in April 2020, IndiaLends announced the launch of Digital Lending 2.0, a range of contactless and touchless products, including insurance, credit lines, and loans. This solution is likely to offer effective and quick financial solutions during the pandemic.
Global Digital Lending Market: Restraints
Issues related to network connectivity and infrastructure are projected to restrain growth of the global digital lending market over the forecast period. In middle- and low-income countries, the use of legacy telecom infrastructure that cannot provide high-capacity and low latency connectivity, is still observed. Due to poor internet connection, quality of customer experience decreases. And all the digital lending platforms offers services that can be hindered due to slow internet speed. Which is why, lack of high speed internet limits the adoption of digital lending, which is likely to impede growth of the market in the near future.
Global Digital Lending Market - Impact of Coronavirus (Covid-19) Pandemic :
The Covid-19 outbreak in China spread across more than 100 countries across the globe. Several industries were impacted by the pandemic. The digital lending platform however, was positively impacted by the pandemic. During the lockdown period, several government around the globe implemented regulations under which many businesses had to close down temporarily. However, banks and credit unions started improving their digital banking services in order to cater the high demand from their customers during the epidemic. This further create several growth opportunities for market players in the global digital lending market and positively impacted growth of the market.
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Key Takeaways:
The global digital lending market was valued at US$ 334.7 Mn in 2021 and is forecast to reach a value of US$ 860.5 Mn by 2030 at a CAGR of 26.9% between 2022 and 2030.
Consumer segment held dominant position in the global digital lending market in 2021, accounting for 73.7% share in terms of value, increasing approval and launch of new products is expected to propel growth of the segment during the forecast period.
Global Digital Lending Market Trends:
Digital consumer engagement and algorithmic lending are gaining traction in the global digital lending market. The focus on digital consumer engagement and algorithmic lending by service providers is likely to play important roles in credit sanctioning, operations and other backend operations. This will lead to lenders focusing on redeployment of various resources in other departments. Thus, this trend is expected to continue in the global digital lending market over the forecast period.
Moreover, increasing adoption of novel solutions and regular updates of solutions is another growing trend in the global digital lending market. As the market is faces cyber threats and financial frauds, the adoption of new solutions and updates of these solutions is growing all over the world among service providers for mitigation of these risks. Thus, this factor is expected to propel growth of the market in the forecast future.
Global Digital Lending Market: Competitive Landscape
On Deck Capital Inc., Lendingclub Corp., and Social Finance Inc. (Sofi)
Global Digital Lending Market: Recent Developments
In May 2020, Samsung Electronics America Inc. partnered with SoFi and launched Samsung Money by SoFi, a novel mobile-first money management experience to bring a cash management account and Mastercard debit card to Samsung Pay.
In February 2020, Lendingclub Corp. announced that the company acquired Radius Bank and with this acquisition, the company is expecting enhancement of ability of LendingClun to serve the customers, diversify and increase earnings and revenue, grow its market opportunities, and offer both regulatory clarity and funding resilience.
