From pay-to-credit, this how the P2P market will grow in 2022

By Puja Sharma

The P2P market is becoming more balanced in terms of the big player’s distribution. It is expected to grow by at least 20% in 2022. In addition to systematic growth, it has significant potential outside the industry.

Peer-to-peer payments, often known as P2P payments, are electronic transactions that can be used for everything from splitting a dinner bill among friends to paying a landlord’s rent. These payments enable the transfer of monies between two parties via an online or mobile app, utilizing their respective banking accounts or credit cards. As more and more of these types of platforms arise, they are growing more popular among individuals of all ages.

Specialists are also betting on the industry going beyond the traditional framework through joint projects with other financial sectors.

The optimistic scenario for this year is supported by the general development trend of 2021. Specialists are also betting on the industry going beyond the traditional framework through joint projects with other financial sectors.

Positive P2P market forecasts for the current year are facilitated, first of all, by the trend towards an increase in the volume of attracted financing in 2021. According to P2PMarketdata.com, the European P2P lending market in December reached a level of attraction of 671m euros, showing a growth of 43% YoY.

It is noteworthy that in December 2021, the long-awaited mark of the pre-pandemic market milestone was finally reached and overcome. With the natural development of the trend for 2022, the market can increase by at least 20%. For European consumer and business lending platforms, growth rates are expected to at least double to an estimated +47% YoY.

“The P2P market is becoming more balanced in terms of the big player’s distribution. In addition to systematic growth, it has significant potential outside the industry. We are talking about both geographic opportunities, such as working with new loan originators, and cross-segment, namely new types of projects with other financial sectors, such as banks. This, and the subsequent growth across the EU economy as a whole, promises to boost investor activity this year.” – Platform expert commented on the forecasts.

According to the results of the latest survey conducted by the Robocash platform, P2P investments, among other instruments, rank third in the investor portfolios (19.5%). The respondents pay more attention to shares (26%) and ETFs (25%).

Although the majority of respondents still prefer passive savings, a significant 28% choose diversification as their main motive for choosing P2P investments. High returns are in third place, respectively (20%).

Peer-to-peer (P2P) lending, also referred to as marketplace lending, is a method of online debt financing, which allows creditors to lend varying sums of money to small businesses and individual borrowers. P2P lending transactions are not only economical for borrowers but also a profitable investment opportunity for retail lenders. Moreover, it allows individuals to give loans to other individuals or participate in pools of loans, thus limiting the market risk.

“Fairly confident portfolio diversification indicates significant customer investment experience. This is expressed both in the inclusion of various types of assets in investor portfolios and the choice of different strategies within one of the instruments. For example, only 15% of Robocash customers invest just in short-term loans. At the same time, when choosing a specific P2P platform, investors are guided by various factors, which also indicates a quite deep understanding of what is happening in the industry”. – Robocash analysts commented.

The Peer to Peer Lending Market $67.93b in 2019, and is projected to reach $558.91b by 2027, growing at a CAGR of 29.7% from 2020 to 2027.

P2P lending will grow as an emerging investment channel for lenders (investors) seeking higher returns, as it allows them to pick and choose the borrowers who best match their risk and reward criteria. It also outperforms other currently available investment options.

• With more safeguards in place and greater returns, these platforms will continue to grow as a viable investment opportunity for individuals.
• In terms of funding, Razorpay, Lendingkart, Policy Bazaar, Paytm, and Cred emerged as the top five fintech businesses in 2021.

Interestingly, the cryptocurrency, which caused a particular surge of interest last year, ranks sixth among other assets. According to a July survey by Robocash, two-thirds of P2P investors had it in their portfolio.