CrowdLending (Business) - Eastern Europe

The total transaction value in the Crowdlending (Business) market market in Eastern Europe is forecasted to reach US$11.77m in 2024.
When looking at a global scale, it is evident that China leads with the highest transaction value, expected to hit US$16bn in 2024.
CrowdLending in Eastern Europe, particularly in Poland, is gaining momentum as businesses seek alternative capital raising methods amidst economic uncertainties.

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 Europe has been experiencing significant growth in recent years.

Customer preferences: In Eastern Europe, businesses are increasingly turning to crowd lending as a source of financing. This is mainly due to the ease and convenience of accessing funds through online platforms. Businesses appreciate the quick turnaround time and the ability to reach a large pool of potential lenders. Additionally, crowd lending offers businesses the opportunity to diversify their sources of funding and reduce their dependence on traditional banks.

Trends in the market: One of the key trends in the crowd lending market in Eastern Europe is the emergence of specialized platforms catering specifically to businesses. These platforms offer tailored solutions and services to meet the unique needs of businesses seeking financing. This specialization has attracted a growing number of businesses to the crowd lending market, further driving its growth. Another trend in the market is the increasing use of technology and data analytics to assess creditworthiness. Crowd lending platforms in Eastern Europe are leveraging advanced algorithms and machine learning to evaluate the creditworthiness of businesses. This allows for more accurate risk assessment and enables platforms to offer competitive interest rates to borrowers.

Local special circumstances: Eastern Europe has a large number of small and medium-sized enterprises (SMEs) that often struggle to access financing from traditional banks. This has created a significant demand for alternative financing options, such as crowd lending. The rise of crowd lending platforms in Eastern Europe has provided SMEs with a viable alternative to secure the funding they need to grow and expand their businesses.

Underlying macroeconomic factors: The crowd lending market in Eastern Europe has been supported by favorable macroeconomic conditions. Economic growth in the region has been relatively strong, creating a conducive environment for businesses to seek financing. Additionally, low interest rates in many Eastern European countries have made crowd lending an attractive option for both borrowers and lenders. In conclusion, the CrowdLending (Business) market in Eastern Europe is experiencing rapid growth due to customer preferences for quick and convenient financing options, the emergence of specialized platforms, the use of technology and data analytics, the demand for alternative financing options by SMEs, and favorable macroeconomic conditions. As these trends continue to evolve, the crowd lending market in Eastern Europe is expected to further expand and mature in the coming years.

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.