Marketplace Lending (Consumer) - Tanzania

In Tanzania, the total transaction value in the MarketMarketplace Lending (Consumer) market market is expected to reach US$10.88m by 2024.
When compared globally, it is notable that the United States leads with a projected transaction value of US$28bn in 2024.
The Key Market Indicators offer insights into the social and economic landscape of the country, shedding light on market-specific trends.
These indicators, along with information from statistical bureaus, trade groups, and businesses, form the basis for the Statista market projections.
Tanzania's consumer marketplace lending sector is experiencing a surge in digital platforms offering innovative capital-raising solutions for individuals seeking alternative funding sources.

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 Tanzania is experiencing steady growth due to several key factors.

Customer preferences: Tanzanian consumers are increasingly turning to marketplace lending platforms for their borrowing needs. This is driven by the convenience and accessibility offered by these platforms, as well as the ability to obtain loans quickly and easily. Additionally, marketplace lending platforms often offer more competitive 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 Tanzania is the rise of mobile-based lending platforms. With the high mobile penetration rate in the country, these platforms have gained popularity among consumers who may not have access to traditional banking services. Mobile lending platforms leverage mobile money services to disburse loans and collect repayments, making the borrowing process seamless and efficient. Another trend in the market is the increasing use of alternative data for credit scoring. Traditional banks in Tanzania often rely on limited data sources, such as credit bureau reports, to assess borrowers' creditworthiness. In contrast, marketplace lending platforms are leveraging alternative data sources, such as mobile phone usage patterns and social media activity, to make more accurate lending decisions. This allows them to reach a broader pool of borrowers who may not have a traditional credit history.

Local special circumstances: Tanzania has a large unbanked population, with many individuals lacking access to formal financial services. Marketplace lending platforms are filling this gap by providing financial services to underserved segments of the population. These platforms are leveraging technology to reach customers in remote areas, where traditional banks may not have a physical presence. Additionally, marketplace lending platforms are often more flexible when it comes to loan requirements, making them accessible to a wider range of borrowers.

Underlying macroeconomic factors: Tanzania has experienced steady economic growth in recent years, with a growing middle class and increasing disposable income. This has contributed to the demand for credit, as consumers seek to finance their consumption needs and invest in businesses. Additionally, the government has implemented policies to promote financial inclusion and digital payments, which has created an enabling environment for marketplace lending platforms to thrive. In conclusion, the Marketplace Lending (Consumer) market in Tanzania is growing due to customer preferences for convenience and competitive interest rates, as well as the rise of mobile-based lending platforms and the use of alternative data for credit scoring. The local special circumstances of a large unbanked population and the government's focus on financial inclusion 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.