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New York, United States, Aug. 11, 2022 (GLOBE NEWSWIRE) -- Microlending , commonly known as microfinance, is a banking service provided to low-income individuals, groups, or unemployed individuals who lack access to conventional financial services. Like traditional loan providers, microlenders charge interest on loans made to borrowers. Numerous individuals are utilizing micro-loans to launch their businesses, creating employment opportunities for others and bolstering the national economy. Increased acceptance of microlending in developing countries for lifestyle improvement, along with minimal operating costs and low market risk, substantially impacts the global microlending market.
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Increased Adoption of Microlending in Developing Nations Spur the Market Demand
By providing them with financial support, microlending or microfinance is transforming the lives of many people in developing Asia-Pacific and LAMEA countries. The industry is expanding due to increased government programs for microlending in many nations. Additionally, a surge in microlenders aids numerous emerging nations in eliminating poverty and raising living standards for the underprivileged. For instance, a study conducted in Bangladesh found that microfinance was responsible for a 40% decrease in poverty across the nation. Also, many African farmers use microloans to purchase crops, which fuels the market expansion. Further, rural residents borrow money from microlenders to start their enterprises and improve their lifestyles.
With the penetration of smartphones and internet users across the globe, online banking has witnessed significant growth in recent years. Microlending is one of the practical and popular choices for lenders because it offers applicants immediate affordability. In recent years, numerous organizations and people have begun submitting online loan applications rather than engaging in lengthy lending procedures. According to the Federal Reserve, approximately 49% of small firms worldwide applied for loans from banks and non-banking institutions. The industry is expanding due to the simplicity with which borrowers can apply for loans and the numerous advantages lenders enjoy, such as automated loan management and quick approval.
Technological Advances in Microfinancing Create Lucrative Market Opportunities
Increased adoption of digital technology in the microfinance business to build new channels and increase revenue opportunities significantly drive the market. Enhanced connectivity in developing nations and technology advancements in several African and Middle Eastern countries are anticipated to present attractive growth opportunities for the market.
Developing nations' widespread adoption of advanced technologies in the microfinance sector , such as mobile banking, ATMs, and point-of-sale terminals, creates untapped market potential. For instance, the government of India uses the Aadhaar Payment Bridge System to provide microloans and other services to its citizens. Additionally, market leaders are bringing new technology to increase the market share and provide customers with an improved experience, creating future opportunities for the industry.
| Report Metric || Details |
| Market Size || USD 550 Billion by 2030 |
| CAGR || 12.8% (2022-2030) |
| Historical Data || 2019-2020 |
| Base Year || 2021 |
| Forecast Period || 2022-2030 |
| Forecast Units || Value (USD Billion ) |
| Report Coverage || Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| Segments Covered || Transaction Type, and Application |
| Geographies Covered || North America, Europe, Asia-Pacific, LAME and Rest of the World |
| Key Companies Profiled/Vendors || Bank of America Corporation, American Express Company, BNP Paribas S.A., Crédit Agricole Group, Citigroup Inc., JPMorgan Chase & Co, HSBC Holdings plc, Mitsubishi UFJ Financial Group, Inc., Wells Fargo & Company, and Société Générale S.A. |
| Key Market Opportunities || High Demand In Technology Sector Is Pushing Mobile Banking Market |
| Key Market Drivers || Increasing prevalence of Age-related Macular Degeneration |
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Asia-Pacific is the highest revenue contributor and is estimated to grow at a CAGR of 13.2% during the forecast period. China, India, and Japan are among the leading contributors to the region's microlending market expansion. This is attributable to new government rules addressing microlending platforms and growing small and medium-sized businesses throughout the region. Small and medium-sized commercial banks and non-bank financial institutions have also been developing new microlending services to support the economic development of various small businesses. This presents an excellent chance to stimulate the expansion of the microlending market in this region.
LAMEA is the second-largest region and is estimated to reach USD 200 billion by 2030, growing at a CAGR of 12.4%. The rise of the capital market and banking sector in the UAE, Brazil, and Mexico, as well as an increase in customer demand for microcredit programs, fuel the market expansion in the region. The increasing number of commercial microfinance banks in the region makes it easier for small enterprises to obtain loan services, driving the market. Additionally, the expanding financial needs of microentrepreneurs and the enhancement of the quality of financial services have also contributed to the expansion of the microlending market.
Europe holds the third-largest market share . The microlending strategy offers various advantages to end-users, including promoting self-employment, combating social and financial marginalization, and assisting microbusinesses. The growth of the microlending market in this region is fueled by the escalation of financial crises across diverse banking domains and the rise of profit inequality in various European countries. Increased demand for microbusinesses in the United Kingdom, Germany, and France also contributes to the market expansion.
- The global microlending market size was worth USD 187 billion in 2021. It is projected to be valued at USD 550 billion by 2030, growing at a CAGR of 12.8% during the forecast period (2022–2030).
- Provider-wise, the global microlending market is fragmented into Banks, Microfinance Institutes (MFI), Non-Banking Financial Institutions (NBFC), and Others. The Bank segment is the highest contributor to the market and is estimated to grow at a CAGR of 11.3% during the forecast period.
- End-user-wise, the global microlending market is classified into Solo Entrepreneurs & Individuals, Micro Enterprises, and Small Enterprises. The Small Enterprise segment is the highest contributor to the market and is estimated to grow at a CAGR of 11.9% during the forecast period.
- Region-wise, the global microlending market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. Asia-Pacific commands the maximum market share.
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- Accion International
- BlueVine Inc.
- Fundera Inc.
- Kabbage Inc.
- Funding Circle
- StreetShares Inc.
Global Microlending Market: Segmentation
- Micro Finance Institute (MFI)
- Non-Banking Financial Institutions (NBFC)
- Solo Entrepreneurs & Individual
- Micro Enterprises
- Small Enterprises
- North America
TABLE OF CONTENT Introduction Microlending Market Definition Microlending Market Scope Research Methodology Primary Research Research Methodology Assumptions & Exclusions Secondary Data Sources Market Overview Report Segmentation & Scope Value Chain Analysis: Microlending Market Key Market Trends Drivers Restraints Opportunities Porter's Five Forces Analysis Bargaining Power of Suppliers Bargaining Power of Buyers Threat of Substitution Threat of New Entrants Competitive Rivalry Market Share Analysis Provider Overview Introduction Market Size & Forecast Banks Market Size & Forecast Microfinance Institute (MFI) Market Size & Forecast End-user Overview Introduction Market Size & Forecast Solo Entrepreneurs & Individual Market Size & Forecast Micro Enterprises Market Size & Forecast Regional Overview Introduction Market Size & Forecast America North America U.S. By Provider By End-user Canada By Provider By End-user Mexico By Provider By End-user Latin America By Provider By End-user Europe Market Size & Forecast Germany By Provider By End-user France By Provider By End-user U.K. By Provider By End-user Italy By Provider By End-user Spain By Provider By End-user Rest of Europe By Provider By End-user Asia Pacific Market Size & Forecast Japan By Provider By End-user China By Provider By End-user Australia By Provider By End-user India By Provider By End-user South Korea By Provider By End-user Rest of Asia-Pacific By Provider By End-user Middle East & Africa Market Size & Forecast Saudi Arabia By Provider By End-user South Africa By Provider By End-user Kuwait By Provider By End-user Rest of Middle East & Africa By Provider By End-user Company Profile Accion International Company Overview Financial Performance Recent Developments Product Portfolio BlueVine Inc Company Overview Financial Performance Recent Developments Product Portfolio Fundera Inc Company Overview Financial Performance Recent Developments Product Portfolio Conclusion & Recommendation Acronyms & Abbreviations
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- In June 2022 , AquaExchange, a tech-driven platform serving India's multi-billion-dollar shrimp & fish ecosystem, raised USD 3 million in Pre-Series A funding from Endiya Partners, Accion Venture Lab, and previous investors. The firm will invest the funds in enhancing its technology and e-commerce operations and growing its farm automation footprint to more than one million acres of farmland by March 31, 2023, the end of its fiscal year 23.
- In April 2022 , Accion, a global nonprofit organization, announced its participation in a new financial inclusion index, which is part of a worldwide effort by impact measurement partner 60 Decibels to promote standard, comparable impact outcomes data for the microfinance industry.
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