When it comes to the markets around the globe spearheading the peer-to-peer lending industry, several nations come to mind, most notably the U.K., EU and the U.S. But which is fueling the adoption of P2P lending the most?
According to new figures from Business Insider, it depends.
Business Insider’s research unit BI Intelligence released a new report on the global P2P lending market last Friday (May 15) and revealed that while the U.S. is the world’s largest P2P lending market by loan volume, the U.K.’s P2P lending market is 72 percent larger based on per capita. BI Intelligence cited the U.K.’s regulatory environment and low confidence in traditional banks as helping P2P lending to take off in the U.K.
When it comes to the most up-and-coming market, however, BI Intelligence found Europe to be the next leader. Europe experienced the largest growth in this segment in 2014, seeing a 144 percent rise in P2P lending last year (with a valuation of $3.9 billion, reports said).
Small business P2P loans in France alone grew nearly 4,000 percent last year, hitting a valuation of 10.6 million.
The United States has seen massive growth in P2P lending volume, too, with a 128 percent increase in loans in 2014, reaching a valuation of $6.6 billion. Developed nations, researchers said, are fueling P2P loan adoption more than developing nations.
BI Intelligence cites online lending platform players like Lending Club and Prosper as spearheading P2P lending’s ability to gain traction among both business and individual borrowers. Earlier this month, Lending Club released its Q1 2015 figures, which demonstrated the strength of the P2P lending industry. A rise in the sector helped fuel Lending Club’s $81.2 million in quarterly revenue, far surpassing analyst expectations.
Part of what makes P2P lending so viable, some experts say, is its ability to act as a middle man and partner with other lenders, including mainstream banks. So while P2P lending could be seen as an alternative option for borrowers that do not want to go directly to a mainstream bank, some P2P lenders may be working with those banks to land working capital in the hands of business owners.