CrowdLending (Business) - Australia

The total transaction value in the Crowdlending (Business) market market in Australia is expected to hit US$32.33m by 2024.
When comparing globally, it is evident that China leads with a transaction value of US$16bn in 2024.
Australia's CrowdLending market is experiencing a surge in innovative platforms and diverse investment opportunities, attracting both seasoned investors and newcomers alike.

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 Australia has been experiencing significant growth in recent years, driven by a combination of customer preferences, market trends, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Australian businesses are increasingly turning to CrowdLending as a source of funding due to its convenience and accessibility. Traditional lending institutions often have lengthy and complex application processes, making it difficult for small and medium-sized enterprises (SMEs) to access the necessary funds. CrowdLending platforms provide a streamlined application process, allowing businesses to quickly obtain the funding they need. Additionally, many businesses appreciate the transparency and flexibility offered by CrowdLending, as they can choose the terms and interest rates that best suit their needs.

Trends in the market: One of the key trends in the Australian CrowdLending market is the rise of peer-to-peer (P2P) lending platforms. These platforms connect borrowers directly with individual lenders, cutting out the middleman and reducing costs for both parties. P2P lending has gained popularity in Australia due to its ability to offer competitive interest rates and a more personalized lending experience. Another trend in the market is the emergence of specialized CrowdLending platforms catering to specific industries or sectors. These platforms understand the unique needs of businesses in certain sectors and can provide tailored lending solutions. For example, there are CrowdLending platforms that focus on funding startups or supporting sustainable businesses.

Local special circumstances: Australia's strong entrepreneurial culture and vibrant startup ecosystem have contributed to the growth of the CrowdLending market. Startups often face challenges in accessing traditional financing, and CrowdLending provides an alternative source of funding for these innovative ventures. Additionally, the Australian government has implemented policies and initiatives to support SMEs and startups, further encouraging the use of CrowdLending as a financing option.

Underlying macroeconomic factors: The low-interest-rate environment in Australia has made borrowing more attractive for businesses, leading to increased demand for CrowdLending. With interest rates at historic lows, businesses can access funding at lower costs, making it an opportune time to seek financing through CrowdLending platforms. Furthermore, the COVID-19 pandemic has had a significant impact on the Australian economy, with many businesses facing financial challenges. Traditional lenders have become more cautious in their lending practices, making it harder for businesses to secure loans. CrowdLending platforms have filled this gap by providing alternative financing options for businesses in need. In conclusion, the CrowdLending (Business) market in Australia is experiencing growth due to customer preferences for convenience and accessibility, market trends such as the rise of P2P lending and specialized platforms, local special circumstances including Australia's entrepreneurial culture and government support for SMEs, and underlying macroeconomic factors such as low-interest rates and the impact of the COVID-19 pandemic.

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.