Marketplace Lending (Consumer) - Estonia

Total transaction value in the MarketMarketplace Lending (Consumer) market market in Estonia is projected to reach US$1.28m in 2024.
From a global comparison perspective, it is shown that the highest transaction value is reached the United States (US$28bn in 2024).
The following Key Market Indicators give an overview of the social and economic outlook of Estonia and provide additional insights into relevant market-specific developments.
These indicators, together with data from statistical offices, trade associations, and companies, serve as the foundation for the Statista market models.
Estonia's Marketplace Lending sector is experiencing a surge in P2P platforms, offering innovative capital-raising solutions for consumers seeking alternative financing options.

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 Estonia is experiencing significant growth and development.

Customer preferences: Estonian consumers are increasingly turning to marketplace lending platforms as an alternative to traditional banks for their borrowing needs. This can be attributed to several factors. Firstly, marketplace lending offers a faster and more convenient application process compared to traditional banks, allowing borrowers to access funds quickly and easily. Additionally, marketplace lending platforms often provide more flexible lending terms and lower interest rates, making them an attractive option for borrowers. Furthermore, the transparency and simplicity of marketplace lending platforms are appealing to Estonian consumers who value ease of use and clear terms.

Trends in the market: One of the key trends in the marketplace lending market in Estonia is the rise of peer-to-peer lending platforms. These platforms connect borrowers directly with individual lenders, bypassing the need for traditional financial intermediaries. This trend is driven by the increasing popularity of crowdfunding and the desire for individuals to have more control over their investments. Peer-to-peer lending platforms also offer borrowers the opportunity to access loans at competitive rates, as individual lenders are often willing to offer lower interest rates compared to traditional banks. Another trend in the marketplace lending market in Estonia is the growing demand for small business loans. As the Estonian economy continues to thrive, more entrepreneurs are seeking financing options to start or expand their businesses. Marketplace lending platforms provide a viable alternative to traditional bank loans, offering small business owners access to capital without the stringent requirements and lengthy approval processes associated with banks. This trend is further fueled by the increasing availability of data and technology, which allows marketplace lenders to assess the creditworthiness of small businesses more accurately.

Local special circumstances: Estonia has a highly digitalized economy, with a high level of internet penetration and a tech-savvy population. This digital readiness has created a conducive environment for the growth of marketplace lending platforms. Estonian consumers are comfortable with online transactions and are increasingly embracing digital financial services. The government has also been supportive of the fintech industry, implementing regulations that promote innovation and competition in the marketplace lending sector.

Underlying macroeconomic factors: The strong performance of the Estonian economy is a key driver of the marketplace lending market. Estonia has experienced robust economic growth in recent years, supported by a favorable business environment, a skilled workforce, and a vibrant startup ecosystem. This economic growth has resulted in increased consumer confidence and disposable income, driving the demand for borrowing and fueling the growth of marketplace lending platforms. In conclusion, the Marketplace Lending (Consumer) market in Estonia is witnessing significant growth and development due to customer preferences for convenience, flexibility, and transparency. The rise of peer-to-peer lending platforms and the increasing demand for small business loans are key trends in the market. The local special circumstances, such as Estonia's digital readiness and supportive government regulations, further contribute to the growth of the marketplace lending sector. The underlying macroeconomic factors, including strong economic growth and increased consumer confidence, provide a favorable environment for the marketplace lending market in Estonia.

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.