CrowdLending (Business) - Uganda | Statista Market Forecast

The total transaction value in the Crowdlending (Business) market market in Uganda is expected to reach US$328.60k in 2024.
When comparing globally, it is evident that China leads with a transaction value of US$16bn in 2024.
In Uganda, CrowdLending platforms are gaining traction as a preferred alternative for capital raising among small and medium-sized businesses.

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 Uganda is experiencing significant growth and development.

Customer preferences: In recent years, Ugandan businesses have shown a growing interest in alternative financing options, such as CrowdLending. This can be attributed to several factors, including limited access to traditional banking services and a desire for more flexible and convenient funding solutions. CrowdLending platforms offer businesses the opportunity to access capital quickly and easily, without the need for extensive paperwork or collateral. Additionally, many businesses appreciate the transparency and fairness of the CrowdLending model, as it allows them to negotiate loan terms directly with lenders.

Trends in the market: One of the key trends in the CrowdLending market in Uganda is the increasing number of platforms and lenders entering the market. This is driven by the growing demand for alternative financing options and the potential for high returns on investment. As more platforms emerge, competition among lenders is also increasing, leading to more favorable loan terms for borrowers. Additionally, there is a trend towards specialization in the market, with platforms focusing on specific industries or types of businesses. This allows lenders to have a better understanding of the risks and opportunities associated with each borrower, leading to more targeted and efficient lending.

Local special circumstances: Uganda has a vibrant and dynamic entrepreneurial ecosystem, with a large number of small and medium-sized enterprises (SMEs) looking for financing options. However, many of these businesses face challenges in accessing traditional bank loans due to lack of collateral or a limited credit history. CrowdLending platforms provide a viable alternative for these businesses, offering them the opportunity to access capital based on their business potential rather than traditional credit metrics. Additionally, the rise of mobile banking and digital payments in Uganda has made it easier for businesses to transact with lenders on CrowdLending platforms, further driving the growth of the market.

Underlying macroeconomic factors: The development of the CrowdLending market in Uganda is also influenced by underlying macroeconomic factors. The country has experienced steady economic growth in recent years, with a growing middle class and an increasing number of businesses. This has created a demand for financing options that can support business expansion and investment. Additionally, the government has implemented policies to promote entrepreneurship and small business development, which has further fueled the demand for alternative financing options. Overall, the combination of favorable macroeconomic conditions and a supportive regulatory environment has created a conducive environment for the growth of the CrowdLending market in Uganda.

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.