Market Insights Financial Capital Raising Digital Capital Raising

CrowdLending (Business) - Philippines

Philippines

The Philippines is expected to achieve a total transaction value of US$10.84m in the Crowdlending (Business) market market by 2024.
When compared globally, China is projected to lead with a transaction value of US$15,970m in the same year.
In the Philippines, CrowdLending platforms are gaining traction as a popular choice for capital raising among small to medium-sized businesses in need of funding.

Key regions: China, United Kingdom, Brazil, Israel, India

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Analyst Opinion

The CrowdLending (Business) market in Philippines has experienced significant growth in recent years, driven by changing customer preferences, emerging trends in the market, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Customers in the Philippines are increasingly turning to CrowdLending platforms for their business financing needs. This shift in preference can be attributed to the convenience and accessibility offered by these platforms. Unlike traditional banks, CrowdLending platforms provide a quick and streamlined application process, allowing businesses to access funding in a shorter period of time. Additionally, the transparency and competitive interest rates offered by these platforms are appealing to customers who are looking for alternative financing options.

Trends in the market: One of the key trends in the CrowdLending (Business) market in Philippines is the rise of peer-to-peer lending platforms. These platforms connect borrowers directly with lenders, eliminating the need for intermediaries and reducing costs. This trend has gained traction due to the increasing trust and confidence in online financial transactions, as well as the potential for higher returns for lenders. Another trend in the market is the emergence of specialized CrowdLending platforms catering to specific industries or sectors. These platforms understand the unique financing needs of businesses in different sectors and provide tailored solutions. For example, there are platforms that focus on providing financing to small and medium-sized enterprises (SMEs), startups, or agriculture businesses. This trend reflects the growing demand for niche financing options in the market.

Local special circumstances: The Philippines has a large population of unbanked or underbanked individuals and businesses. This presents a significant opportunity for CrowdLending platforms to fill the financing gap and provide access to funding for these underserved segments. CrowdLending platforms are able to leverage technology to reach a wider audience and provide financial services to those who may not have access to traditional banking services. Additionally, the Philippines has a vibrant entrepreneurial ecosystem, with a growing number of startups and SMEs. These businesses often face challenges in accessing financing from traditional sources, making CrowdLending platforms an attractive alternative. The supportive regulatory environment and government initiatives to promote entrepreneurship further contribute to the growth of the CrowdLending (Business) market in Philippines.

Underlying macroeconomic factors: The strong economic growth in the Philippines has created a favorable environment for the development of the CrowdLending (Business) market. As businesses expand and seek financing for their growth plans, CrowdLending platforms offer a viable solution. The low interest rate environment and stable inflation also contribute to the attractiveness of CrowdLending platforms as a financing option. Furthermore, the increasing digital penetration and smartphone adoption in the country have facilitated the growth of the CrowdLending (Business) market. With more individuals and businesses having access to the internet and mobile devices, the reach of CrowdLending platforms has expanded, allowing them to tap into a larger customer base. In conclusion, the CrowdLending (Business) market in Philippines is experiencing rapid growth due to changing customer preferences, emerging trends in the market, local special circumstances, and underlying macroeconomic factors. The convenience and accessibility offered by CrowdLending platforms, the rise of peer-to-peer lending and specialized platforms, the unbanked or underbanked population, the vibrant entrepreneurial ecosystem, and the favorable macroeconomic environment are all contributing to the development of this market.

Methodology

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.