CrowdLending (Business) - Ecuador

Ecuador is projected to reach a total transaction value of US$67.19k in the Crowdlending (Business) market market by 2024.
When compared globally, it is notable that China is expected to achieve the highest transaction value, reaching US$16bn in 2024.
In Ecuador, CrowdLending platforms are gaining traction as a popular alternative for local businesses to raise capital in the evolving Capital Raising market.

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 Ecuador is experiencing significant growth and development.

Customer preferences: In recent years, there has been a shift in customer preferences towards alternative financing options, such as crowd lending. This is primarily driven by the increasing difficulty for small and medium-sized businesses to access traditional bank loans. Crowd lending platforms provide a more accessible and flexible financing option, allowing businesses to raise funds directly from individual investors.

Trends in the market: One of the key trends in the CrowdLending (Business) market in Ecuador is the rise of peer-to-peer lending platforms. These platforms connect borrowers directly with lenders, eliminating the need for intermediaries such as banks. This not only reduces the cost of borrowing for businesses but also provides investors with an opportunity to earn higher returns on their investments. Another trend in the market is the increasing adoption of technology in the crowd lending process. Online platforms have made it easier for businesses to apply for loans and for investors to review and select investment opportunities. This has significantly streamlined the lending process, making it more efficient and convenient for both borrowers and lenders.

Local special circumstances: The CrowdLending (Business) market in Ecuador is also influenced by local special circumstances. One such circumstance is the high interest rates charged by traditional banks. This has created a demand for alternative financing options, such as crowd lending, which offer more competitive interest rates. Another special circumstance is the limited access to capital for small and medium-sized enterprises (SMEs). Traditional banks often require extensive documentation and collateral, making it difficult for SMEs to qualify for loans. Crowd lending platforms, on the other hand, have more flexible lending criteria, making it easier for SMEs to access the financing they need to grow their businesses.

Underlying macroeconomic factors: The development of the CrowdLending (Business) market in Ecuador is also influenced by underlying macroeconomic factors. One such factor is the overall economic growth of the country. As the economy grows, businesses require more capital to expand their operations, creating a greater need for financing options. Another macroeconomic factor is the stability of the financial system. Crowd lending platforms provide an alternative to traditional banks, and their growth is often driven by a lack of trust in the banking sector. Therefore, a stable and reliable financial system is essential for the development of the crowd lending market. In conclusion, the CrowdLending (Business) market in Ecuador is experiencing growth and development due to changing customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors. As more businesses turn to crowd lending as a financing option, the market is expected to continue to expand 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.