CrowdLending (Business) - Eastern Asia

The Crowdlending (Business) market market in Eastern Asia is anticipated to achieve a total transaction value of US$16.64bn by 2024.
When comparing globally, China is expected to lead with a transaction value of US$16bn in 2024.
In South Korea, the CrowdLending market is flourishing, with a growing number of businesses turning to this alternative capital raising method.

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 Eastern Asia has been experiencing significant growth in recent years.

Customer preferences: One of the main reasons for the growth in the CrowdLending (Business) market in Eastern Asia is the increasing demand for alternative financing options among businesses. Traditional banks have become more stringent in their lending practices, making it difficult for small and medium-sized enterprises (SMEs) to access the capital they need to grow. As a result, businesses are turning to CrowdLending platforms as a viable alternative.

Trends in the market: One of the key trends in the CrowdLending (Business) market in Eastern Asia is the rise of peer-to-peer lending platforms. These platforms connect individual lenders with borrowers, allowing businesses to access capital directly from investors. This trend has gained popularity due to its convenience and the potential for higher returns for lenders. Additionally, there has been a growing interest in sustainable and socially responsible lending in the region. Many businesses are seeking funding for projects that have a positive impact on society or the environment. CrowdLending platforms are well-suited to cater to this demand, as they can connect businesses with investors who share their values.

Local special circumstances: Eastern Asia is home to several countries with rapidly growing economies, such as China, Japan, and South Korea. These countries have a large number of small and medium-sized enterprises (SMEs) that are in need of financing to support their growth. CrowdLending platforms offer an efficient and accessible way for these businesses to access capital, fueling the growth of the market in the region. Furthermore, the high level of technological advancement in Eastern Asia has also contributed to the growth of the CrowdLending (Business) market. The region has a high internet penetration rate and a tech-savvy population, making it easier for businesses and investors to connect through online platforms.

Underlying macroeconomic factors: The growth of the CrowdLending (Business) market in Eastern Asia is also influenced by underlying macroeconomic factors. For example, low interest rates in the region have made traditional savings accounts less attractive for investors. As a result, many individuals are turning to CrowdLending platforms as a way to earn higher returns on their investments. In addition, the region's growing middle class and rising disposable incomes have led to increased consumer spending. This has created a favorable environment for businesses to expand and seek financing through CrowdLending platforms. Overall, the CrowdLending (Business) market in Eastern Asia is experiencing significant growth due to the increasing demand for alternative financing options, the rise of peer-to-peer lending platforms, the interest in sustainable and socially responsible lending, the presence of a large number of SMEs in need of financing, the high level of technological advancement, low interest rates, and the region's growing middle class.

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.