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Marketplace Lending (Consumer) - Western Africa

Western Africa

Western Africa is expected to witness a total transaction value in the MarketMarketplace Lending (Consumer) market market of US$0.4bn in 2024.
When compared globally, the United States leads with a transaction value of US$26,720m in the same year.
Key Market Indicators offer a glimpse into the social and economic landscape of Western Africa, shedding light on market-specific trends.
These indicators, supported by data from statistical offices, trade associations, and businesses, form the basis for the Statista market models.
In Western Africa, the Marketplace Lending sector is gaining traction for consumer capital raising, offering innovative financial solutions to address credit accessibility challenges.

Key regions: United Kingdom, United States, China, Brazil, Australia

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Analyst Opinion

The Marketplace Lending (Consumer) market in Western Africa is experiencing significant growth and development.

Customer preferences: In Western Africa, customers are increasingly turning to marketplace lending platforms for their borrowing needs. This is driven by several factors. Firstly, traditional banks in the region often have stringent lending criteria and lengthy approval processes, making it difficult for many individuals to access credit. Marketplace lending platforms offer a more streamlined and accessible alternative, allowing borrowers to easily apply for loans online and receive funds quickly. Secondly, many customers in Western Africa are unbanked or underbanked, meaning they do not have access to traditional banking services. Marketplace lending platforms provide these individuals with an opportunity to access credit and financial services that were previously unavailable to them.

Trends in the market: One of the key trends in the marketplace lending market in Western Africa is the increasing adoption of mobile technology. Mobile penetration rates in the region are high, and many individuals rely on their mobile phones for a range of financial services. Marketplace lending platforms have capitalized on this trend by developing mobile applications that allow customers to apply for loans and manage their finances on the go. This has made the lending process even more convenient and accessible for customers in Western Africa. Additionally, there is a growing trend towards peer-to-peer lending in the region. This allows individuals to lend money directly to each other, cutting out the middleman and potentially reducing borrowing costs for borrowers.

Local special circumstances: One of the unique challenges in the marketplace lending market in Western Africa is the lack of credit information and scoring systems. Traditional credit bureaus are not as established in the region as they are in other parts of the world, making it difficult for lenders to assess the creditworthiness of borrowers. To overcome this challenge, marketplace lending platforms in Western Africa are utilizing alternative data sources and innovative credit scoring models. This allows them to make lending decisions based on factors such as mobile phone usage, social media activity, and utility bill payment history.

Underlying macroeconomic factors: The development of the marketplace lending market in Western Africa is also influenced by underlying macroeconomic factors. Economic growth in the region, along with a growing middle class, has led to an increase in consumer spending and borrowing. Additionally, the high rate of urbanization in Western Africa has created a demand for housing and infrastructure development, driving the need for financing. These factors, combined with the increasing adoption of technology and the rise of mobile banking, have created a favorable environment for the growth of the marketplace lending market in Western Africa.

Methodology

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.