CrowdLending (Business) - Singapore

The country in Singapore is expected to see a total transaction value of US$8.64m in the Crowdlending (Business) market market by 2024.
When comparing globally, it is evident that China will lead with a transaction value of US$16bn in the same year.
Singapore's CrowdLending market is experiencing a surge in tech-based platforms, attracting both local investors and businesses seeking alternative capital raising solutions.

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 Singapore has been experiencing significant growth in recent years.

Customer preferences: Singaporean businesses are increasingly turning to crowd lending platforms as a source of financing. This is due to the convenience and speed of the process compared to traditional bank loans. Crowd lending allows businesses to access funds quickly and easily, without the need for extensive paperwork or collateral. Additionally, crowd lending platforms often offer competitive interest rates, making them an attractive option for businesses seeking affordable financing.

Trends in the market: One of the key trends in the CrowdLending (Business) market in Singapore is the rise of peer-to-peer lending platforms. These platforms connect individual lenders directly with businesses in need of funding. This model has gained popularity due to its efficiency and transparency. It allows businesses to access a wider pool of lenders, increasing their chances of securing funding. Peer-to-peer lending platforms also often offer lower interest rates compared to traditional lenders, further driving their popularity. Another trend in the market is the increasing use of technology in the crowd lending process. Many platforms now use sophisticated algorithms to match lenders with borrowers based on their risk profile and investment preferences. This not only streamlines the lending process but also helps to mitigate risk for lenders. Additionally, technological advancements have made it easier for businesses to apply for crowd loans, with many platforms offering online application processes that can be completed in a matter of minutes.

Local special circumstances: Singapore's strong regulatory framework has played a significant role in the development of the CrowdLending (Business) market. The Monetary Authority of Singapore (MAS) has implemented regulations to ensure the stability and integrity of the market. This has helped to build trust among both lenders and borrowers, contributing to the growth of the market.

Underlying macroeconomic factors: Several macroeconomic factors have contributed to the growth of the CrowdLending (Business) market in Singapore. One factor is the increasing demand for financing among small and medium-sized enterprises (SMEs). As Singapore's economy continues to grow, more SMEs are looking for funding to support their expansion plans. Crowd lending provides a viable alternative to traditional bank loans for these businesses. Another factor is the low interest rate environment. With interest rates at historic lows, many businesses are seeking alternative sources of financing that offer more attractive terms. Crowd lending platforms often offer competitive interest rates, making them an appealing option for businesses. In conclusion, the CrowdLending (Business) market in Singapore is growing rapidly due to customer preferences for convenience and competitive interest rates. The rise of peer-to-peer lending platforms and the use of technology in the lending process are key trends in the market. Singapore's strong regulatory framework and underlying macroeconomic factors, such as the increasing demand for financing among SMEs and the low interest rate environment, have also contributed to the growth 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.