CrowdLending (Business) - Portugal

The total transaction value in the Crowdlending (Business) market market in Portugal is expected to reach US$9.76m in 2024.
When comparing globally, it is evident that the highest transaction value is achieved China (US$16bn in 2024).
Portugal's CrowdLending market is seeing a surge in investor interest, with innovative platforms offering diverse capital-raising opportunities for businesses across various sectors.

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 Portugal is experiencing significant growth and development, driven by various factors such as customer preferences, market trends, local special circumstances, and underlying macroeconomic factors.

Customer preferences: In Portugal, businesses are increasingly turning to crowd lending as a financing option due to its convenience and accessibility. Crowd lending platforms offer a streamlined application process and quick funding, making it an attractive option for businesses in need of capital. Additionally, the ability to connect with a large pool of potential lenders allows businesses to secure funding even if they have been turned down by traditional lenders. This customer preference for crowd lending is contributing to the growth of the market in Portugal.

Trends in the market: One of the key trends in the CrowdLending (Business) market in Portugal is the emergence of specialized platforms catering to specific industries or sectors. These platforms provide businesses with access to lenders who have a deep understanding of their industry, increasing the likelihood of securing funding. This trend reflects the growing demand for customized financing solutions and the recognition that industry-specific knowledge can enhance the lending process. Another trend in the market is the increasing use of technology and data analytics in the crowd lending process. Platforms are leveraging advanced algorithms and machine learning to assess the creditworthiness of borrowers and determine appropriate interest rates. This use of technology not only improves the efficiency of the lending process but also reduces the risk for lenders, making crowd lending a more attractive option.

Local special circumstances: Portugal has a vibrant entrepreneurial ecosystem, with a growing number of startups and small businesses seeking funding. Crowd lending provides these businesses with an alternative to traditional financing options, which may be more difficult to access for early-stage ventures. This local special circumstance of a thriving entrepreneurial ecosystem is fueling the growth of the CrowdLending (Business) market in Portugal.

Underlying macroeconomic factors: The economic environment in Portugal is also contributing to the development of the CrowdLending (Business) market. Following the global financial crisis, traditional banks tightened their lending criteria, making it more challenging for businesses to secure financing. Crowd lending has emerged as a viable alternative, offering businesses a way to access capital that may not be available through traditional channels. The economic recovery in Portugal has also created a favorable environment for crowd lending, as businesses are looking to expand and invest in growth opportunities. In conclusion, the CrowdLending (Business) market in Portugal is experiencing significant growth and development due to customer preferences, market trends, local special circumstances, and underlying macroeconomic factors. The convenience and accessibility of crowd lending, the emergence of specialized platforms, the use of technology and data analytics, the vibrant entrepreneurial ecosystem, and the economic environment in Portugal are all contributing to the expansion of the 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.