CrowdLending (Business) - Caribbean

The Caribbean is projected to reach a total transaction value of US$80.22k in the Crowdlending (Business) market market by 2024.
When comparing globally, it is evident that China is expected to achieve the highest transaction value, reaching US$16bn in 2024.
In the Caribbean, CrowdLending platforms are gaining traction as local businesses seek alternative capital raising solutions amid limited traditional financing options.

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 Caribbean is experiencing significant growth and development.

Customer preferences: Caribbean businesses are increasingly turning to CrowdLending platforms as a source of funding. This is driven by the convenience and accessibility offered by these platforms, as well as the potential for lower interest rates compared to traditional banks. Additionally, many businesses in the Caribbean are small and medium-sized enterprises (SMEs) that may struggle to obtain financing from traditional sources, making CrowdLending an attractive alternative.

Trends in the market: One of the key trends in the Caribbean CrowdLending market is the emergence of specialized platforms catering to specific industries. For example, there are platforms that focus on funding renewable energy projects, agriculture ventures, and tourism-related businesses. This trend reflects the unique economic landscape of the Caribbean, where these industries play a significant role in the local economy. By targeting specific sectors, these platforms are able to provide tailored financing solutions that meet the needs of businesses in these industries. Another trend in the Caribbean CrowdLending market is the increasing use of technology and data analytics to assess the creditworthiness of borrowers. This allows platforms to make more informed lending decisions and mitigate the risk of default. Furthermore, the use of technology streamlines the lending process, reducing the time it takes for businesses to access funds. This is particularly important for SMEs in the Caribbean, as they often require quick and flexible financing solutions to support their growth.

Local special circumstances: The Caribbean region is characterized by a high level of economic vulnerability, with many countries heavily dependent on tourism and agriculture. This makes access to financing crucial for businesses in the region, as it enables them to invest in infrastructure, expand operations, and create jobs. CrowdLending platforms provide an alternative source of funding that can help businesses overcome the challenges they face in accessing traditional financing options.

Underlying macroeconomic factors: The development of the CrowdLending (Business) market in the Caribbean is supported by several underlying macroeconomic factors. Firstly, the region has experienced steady economic growth in recent years, driven by factors such as increased tourism, foreign direct investment, and government initiatives to promote entrepreneurship. This positive economic environment provides a favorable backdrop for the growth of the CrowdLending market. Secondly, the Caribbean region has a relatively young population, which is increasingly tech-savvy and open to new financial solutions. This demographic factor contributes to the growing popularity of CrowdLending platforms, as businesses and individuals are more willing to embrace digital technologies and explore alternative financing options. In conclusion, the CrowdLending (Business) market in the Caribbean is developing rapidly, driven by customer preferences for convenient and accessible financing solutions, as well as the unique economic circumstances of the region. The emergence of specialized platforms and the use of technology are key trends shaping the market, while the high level of economic vulnerability and positive macroeconomic factors provide a supportive environment for its growth.

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.