Key regions: United Kingdom, United States, China, Brazil, Australia
Marketplace lending (consumer) in Eastern Africa is witnessing significant growth and development, driven by changing customer preferences, emerging trends in the market, local special circumstances, and underlying macroeconomic factors. Customer preferences in Eastern Africa are shifting towards digital platforms and online lending solutions.
With the increasing penetration of smartphones and internet connectivity, consumers are becoming more comfortable with accessing financial services online. This has resulted in a growing demand for marketplace lending platforms that offer convenient and hassle-free borrowing options. Trends in the marketplace lending (consumer) market in Eastern Africa include the rise of peer-to-peer lending platforms and the emergence of alternative credit scoring models.
Peer-to-peer lending platforms connect borrowers directly with lenders, eliminating the need for traditional financial intermediaries. This provides borrowers with access to credit at competitive interest rates, while lenders can diversify their investment portfolios. Additionally, alternative credit scoring models are being developed to assess the creditworthiness of borrowers who have limited or no formal credit history.
These models utilize alternative data sources such as mobile phone usage, utility bill payments, and social media activity to evaluate creditworthiness. Local special circumstances in Eastern Africa, such as a large unbanked population and limited access to formal financial services, are driving the growth of marketplace lending. Traditional banks have struggled to reach the underserved population, leading to a significant credit gap.
Marketplace lending platforms are filling this gap by providing accessible and inclusive financial services to individuals who were previously excluded from the formal banking sector. Underlying macroeconomic factors, such as economic growth, urbanization, and demographic changes, are also contributing to the development of the marketplace lending (consumer) market in Eastern Africa. Economic growth has led to an increase in disposable income and consumer spending, creating a greater demand for credit.
Urbanization has resulted in a larger population living in cities, where access to formal financial services may be limited. Furthermore, demographic changes, such as a young and tech-savvy population, are driving the adoption of digital lending platforms. In conclusion, the marketplace lending (consumer) market in Eastern Africa is experiencing significant growth and development due to changing customer preferences, emerging trends, local special circumstances, and underlying macroeconomic factors.
The shift towards digital platforms, the rise of peer-to-peer lending, the development of alternative credit scoring models, the unbanked population, and economic growth are all contributing to the expansion of the marketplace lending (consumer) market in Eastern Africa.
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.
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