Marketplace Lending (Consumer) - Canada

The total transaction value in the MarketMarketplace Lending (Consumer) market market in Canada is forecasted to reach US$4.02m in 2024.
When compared globally, it is evident that the United States leads with a transaction value of US$28bn in 2024.
Key Market Indicators offer a snapshot of the social and economic landscape of the country and offer further insights into specific market trends.
These indicators, in conjunction with data from statistical offices, trade associations, and businesses, form the basis for the Statista market models.
In Canada, Marketplace Lending in Capital Raising is gaining traction as consumers seek alternative financing options amidst evolving financial landscapes.

Definition:

Marketplace Lending platforms offer private users the option to place requests for loans in an online marketplace to find private investors who would invest at an appropriate interest rate. These services apply a credit score and list the financial requests by intended purpose before fixing a lending rate. One or more investors can then serve the credit request. Although banks act in cooperation with the platform providers, the lending is done, in principle, without direct exposure, risk audits or the formal requirements normally associated with credit lending. This is attractive for many users because the processes are expedited, there is less demand when it comes of the borrower’s creditworthiness and the conditions are often more flexible than with traditional bank loans. Users are defined in this case as active borrowers on an online platform; applicants or investors who are only partially recorded as users are not included. The amount of outstanding, short-term installments or consumer loans recognized during the applicable year is used here as a benchmark.

Additional Information:

Key players in the market are Lending Club, Zopa, Auxmoney and Prosper.

Online marketplace for personal loan applications and private investors
Peer-to-Peer loans with interest rates depending on internal credit scoring of the platform provider

Online comparison websites for bank loans
Traditional bank loans
Loans for business purposes (see Crowdlending)

The Marketplace Lending (Consumer) market in Canada has been experiencing significant growth and development in recent years.

Customer preferences: Customers in Canada are increasingly turning to marketplace lending platforms as an alternative to traditional banks for their borrowing needs. This shift in preference can be attributed to several factors. Firstly, marketplace lending offers borrowers a more streamlined and convenient application process compared to traditional banks. Borrowers can easily apply for loans online, and receive funding within a shorter time frame. Additionally, marketplace lending platforms often provide more flexible loan terms and lower interest rates compared to traditional banks, making them an attractive option for borrowers.

Trends in the market: One of the key trends in the marketplace lending market in Canada is the increasing adoption of technology. Many marketplace lending platforms in Canada leverage advanced algorithms and data analytics to assess borrower creditworthiness and determine loan eligibility. This allows lenders to make faster and more accurate lending decisions, resulting in a more efficient and streamlined lending process. Furthermore, the use of technology also enables marketplace lenders to offer personalized loan products and services tailored to the specific needs of individual borrowers. Another trend in the marketplace lending market in Canada is the growing popularity of peer-to-peer lending. Peer-to-peer lending platforms connect borrowers directly with individual lenders, bypassing traditional financial intermediaries. This allows borrowers to access loans at competitive interest rates, while lenders can earn higher returns on their investments compared to traditional savings accounts or fixed-income investments. The peer-to-peer lending model also promotes financial inclusion, as it provides access to credit for individuals who may have difficulty obtaining loans from traditional banks due to limited credit history or other factors.

Local special circumstances: One of the unique aspects of the marketplace lending market in Canada is the regulatory environment. The Canadian government has taken a proactive approach in regulating marketplace lending platforms to ensure consumer protection and maintain the stability of the financial system. This has led to the emergence of a well-regulated marketplace lending industry in Canada, providing borrowers with greater confidence and trust in the platform.

Underlying macroeconomic factors: The growth of the marketplace lending market in Canada can also be attributed to underlying macroeconomic factors. The low interest rate environment in Canada has made borrowing more affordable, leading to increased demand for loans. Additionally, the strong economy and low unemployment rate in Canada have contributed to a favorable credit environment, making it easier for borrowers to access credit. In conclusion, the Marketplace Lending (Consumer) market in Canada is growing rapidly due to customer preferences for convenience, flexibility, and competitive loan terms. The adoption of technology and the popularity of peer-to-peer lending are key trends in the market. The well-regulated regulatory environment in Canada and favorable macroeconomic factors have also contributed to the growth of the marketplace lending market in the country.

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.