CrowdLending (Business) - Malaysia

The total transaction value in the Crowdlending (Business) market market in Malaysia is forecasted to reach US$84.57m in 2024.
When compared globally, it is evident that China leads with the highest transaction value of US$16bn in 2024.
Malaysia's CrowdLending market in Capital Raising is seeing a surge in tech startups seeking alternative funding sources.

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)

CrowdLending (Business) market in Malaysia has been experiencing significant growth in recent years.

Customer preferences: One of the key reasons for the development of the CrowdLending (Business) market in Malaysia is the increasing demand for alternative financing options among small and medium-sized enterprises (SMEs). Traditional lending institutions often have stringent requirements and lengthy approval processes, making it difficult for SMEs to access the necessary funds. CrowdLending platforms offer a more streamlined and accessible financing solution, allowing businesses to raise capital quickly and efficiently.

Trends in the market: The CrowdLending (Business) market in Malaysia is witnessing a trend towards sector-specific lending platforms. These platforms cater to specific industries, such as technology, agriculture, and retail, and offer tailored financing solutions to businesses operating in these sectors. This trend is driven by the need for specialized funding options that understand the unique challenges and opportunities faced by businesses in different industries. Another trend in the market is the emergence of peer-to-peer (P2P) lending platforms. These platforms connect individual lenders with borrowers, eliminating the need for intermediaries and reducing costs. P2P lending has gained popularity among both investors looking for higher returns and businesses seeking more flexible financing options.

Local special circumstances: One of the unique factors contributing to the growth of the CrowdLending (Business) market in Malaysia is the government's support for SMEs. The Malaysian government has implemented various initiatives and programs to promote entrepreneurship and provide financial assistance to small businesses. This support has created a favorable environment for the development of alternative financing options like CrowdLending.

Underlying macroeconomic factors: The robust economic growth in Malaysia has also played a role in the development of the CrowdLending (Business) market. As the economy expands, the demand for financing among businesses increases, creating opportunities for CrowdLending platforms to fill the gap left by traditional lenders. Additionally, the low interest rate environment in Malaysia has made it more attractive for businesses to seek financing through CrowdLending platforms, as they can access funds at competitive rates. In conclusion, the CrowdLending (Business) market in Malaysia is growing due to the increasing demand for alternative financing options among SMEs. This trend is driven by customer preferences for streamlined and accessible financing solutions. The market is also witnessing the emergence of sector-specific lending platforms and P2P lending platforms. The government's support for SMEs and the robust economic growth in Malaysia are contributing to the development of the CrowdLending market.

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.