CrowdLending (Business) - Argentina

The projected total transaction value in the Crowdlending (Business) market market in Argentina is expected to reach US$1.45m in 2024.
When compared globally, it is evident that China leads with a transaction value of US$16bn in 2024.
In Argentina, CrowdLending platforms are gaining popularity as a viable alternative for capital raising among small and medium-sized businesses in need of funding.

Definition:

Crowdlending platforms, otherwise know as lending-based Crowdfunding enable small and medium-sized enterprises to get loans from single or multiple, private and institutional investors via an online brokering platform. On credit platforms such as Funding Circle, OnDeck, Kabbage and Lending Club, businesses can obtain small loans up to a set maximum value. As a rule, financing requests are analyzed by the provider via an internal scoring system and are checked against additional minimum requirements such as turnover. Subsequently, these financing requests can be invested in by private and institutional investors at an appropriate interest rate determined by the credit rating of the company. This makes it possible for SMEs to borrow quickly and easily, as the basic requirements for obtaining finance are more flexible compared to traditional bank loans.

Alternative financing for SMEs and freelancers (bank-independent loans)
Small business loans issued by single or multiple private and institutional investors (non-banks)
Online loan request, scoring and approval

Traditional bank loans
Consumer loans and credit card transactions
Business-to-Business credit scoring and rating services
Online marketplaces for consumer loans (see Marketplace Lending)

The CrowdLending (Business) market in Argentina is experiencing significant growth and development in recent years.

Customer preferences: In Argentina, businesses are increasingly turning to CrowdLending as a source of financing. This is driven by several factors. Firstly, traditional lending institutions such as banks have become more stringent in their lending criteria, making it difficult for small and medium-sized businesses to access funding. CrowdLending platforms offer an alternative solution, providing businesses with easier access to capital. Additionally, businesses appreciate the transparency and efficiency of CrowdLending platforms, as the entire lending process is conducted online, reducing paperwork and time-consuming processes.

Trends in the market: One of the key trends in the CrowdLending market in Argentina is the rise of peer-to-peer lending platforms. These platforms connect individual lenders directly with borrowers, cutting out the intermediaries such as banks. This trend is driven by the increasing popularity of online platforms and the desire for individuals to diversify their investment portfolios. Peer-to-peer lending platforms also offer competitive interest rates for borrowers, making them an attractive option for businesses seeking financing. Another trend in the market is the emergence of niche CrowdLending platforms catering to specific industries or sectors. These platforms understand the unique needs and challenges of businesses in these sectors and are able to provide tailored financing solutions. For example, there are CrowdLending platforms that specialize in funding startups or renewable energy projects. This trend reflects the growing demand for specialized financing options in Argentina.

Local special circumstances: Argentina has a vibrant entrepreneurial ecosystem, with many startups and small businesses looking for funding to grow and expand. However, traditional lending institutions have been reluctant to provide financing to these businesses due to perceived risks. CrowdLending platforms have filled this gap by offering alternative financing options to startups and small businesses. This has contributed to the growth of the CrowdLending market in Argentina.

Underlying macroeconomic factors: The development of the CrowdLending market in Argentina is also influenced by macroeconomic factors. Argentina has experienced periods of economic instability and high inflation rates, which have made it challenging for businesses to access affordable financing. CrowdLending platforms provide an alternative to traditional lending institutions, offering businesses more flexibility and competitive interest rates. Additionally, the government in Argentina has implemented policies to support entrepreneurship and innovation, further driving the growth of the CrowdLending market. In conclusion, the CrowdLending (Business) market in Argentina is experiencing significant growth and development. Businesses are turning to CrowdLending platforms as a source of financing due to the ease of access, transparency, and competitive interest rates. The rise of peer-to-peer lending platforms and niche CrowdLending platforms are key trends in the market. The vibrant entrepreneurial ecosystem in Argentina and macroeconomic factors such as economic instability and government support for entrepreneurship are driving the growth of the CrowdLending market in the country.

Data coverage:

The data encompasses B2C enterprises. Figures are based on transaction values / revenues / assets under management and user data of relevant services and products offered within the FinTech market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending, population, internet penetration, smartphone penetration, credit card penetration, and online banking penetration. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

Crowdfunding is the collective effort of a large number of individuals who network and pool small amounts of capital to finance a new or existing business venture. Each campaign is set for a goal amount of money and a fixed timeframe, each day is counted down and the money raised will be tallied up for visitors to follow its success. The size of the global crowdfunding market is growing and the largest markets are North America and Asia.