GVR Report cover Micro Lending Market Size, Share & Trends Report

Micro Lending Market Size, Share & Trends Analysis Report By Service Provider, By End-user, By Region, and Segment Forecasts, 2021 To 2028

  • Published Date: ---
  • Base Year for Estimate: ---
  • Report ID: GVR452017
  • Format: Electronic (PDF)
  • Historical Data: ---
  • Number of Pages: 0

The global micro lending market is expected to witness significant growth over the forecast period. The initiatives being pursued by various governments, particularly those of emerging economies, to ensure access to capital to the financially underserved, such as those unable to obtain lines of credit, checking accounts, or loans from conventional banks; and the policies being drafted by these governments to encourage micro lending as part of the economic development are expected to drive the growth of the market over the forecast period. The outbreak of the COVID-19 pandemic, which took a severe toll on the overall economy and triggered losses, particularly at several smaller businesses, is also expected to drive the demand for micro lending and contribute to the growth of the market.

Micro lending allows owners of smaller businesses to raise the capital they need to manage their business effectively. Micro lending can be described as a financial innovation made possible by the peer-to-peer economy and the advances in technology. One of the purposes micro loans can typically serve is helping the poor in Third World nations to start small businesses. Such a model envisages lenders loaning out a deserving entrepreneur in another country. Companies, such as Kiva, are known for administering micro lending for these humanitarian purposes.

Global Micro Lending Market Segmentation

Segments

Details

Service Provider

Bank; Micro finance Institutes (MFIs); Non-banking Financial Institutions (NBFCs);  Others

End-user

Solo Entrepreneurs & Individuals; Micro Enterprises; Small Enterprises

Region

North America; Europe; Asia Pacific; Latin America; Middle East & Africa

 

Advances in technology, continued digitalization, the proliferation of mobile phones, and the growing popularity of e-wallets and mobile credit are playing a decisive role in driving the growth of the market. Digital technology is particularly facilitating easy and hassle-free repayment of loans, thereby mitigating cash-related risks while augmenting efficiency and reducing costs.

The lower market risk involved in micro lending is expected to drive the growth of the global micro lending market over the forecast period. Micro lending allows prospective businessmen to start a new business with limited capital and develop it further. The continued adoption of the latest, advanced technology in micro-financing systems is also expected to open lucrative opportunities for the growth of the market. However, the smaller loan amounts involved in micro lending and the shorter repayment time provided by micro lenders are some of the factors that are expected to restrain the growth of the market over the forecast period.

Micro lending start-ups are focusing on fundraising in the wake of the outbreak of the COVID-19 pandemic. For instance, in March 2021, Five Star raised USD 234 million in a funding round from a consortium of both homegrown and global investors. New investors, such as TVS Capital Funds (P) Limited and Kohlberg Kravis Roberts & Co. L.P., also participated in the funding round. The funding round demonstrated the increasing investor confidence in the microfinance ecosystem.

The key players in the micro lending market include Accion International; BlueVine Inc.; Fundera Inc.; Funding Circle; Kiva; OnDeck; and StreetShares, Inc.; among others. These market players are pursuing various organic and inorganic growth strategies to cement their market position and increase their market share.

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