Crowdlending Market Size and Forecast

The crowdlending market in Europe has grown from $1.2 billion transactions value in 2013 to a whopping $15 billion in 2018, which translates to an annual growth rate of over 70% on average.

However, the market growth is expected to slow down in the coming five years, growing from $15 billion transactions value in 2018 to $38 billion in the year 2023, representing an expected over 16% annual growth on average.

Why you should invest in crowdlending

There are many benefits to investing in crowdlending. These are:

• Attractive returns

This form of crowdfunding usually offers high rates of interest, starting from 12% on average per year. The interest earned from the crowdlending investment is typically higher compared to those earned from the savings account and is also getting higher and more stable returns than the stocks.

• Differentiation is reducing your risks

Differentiation or diversification is a very important component of any kind of investing and not just crowdlending. Just like an adage goes “Don’t put all your eggs in one basket.” By differentiating, you will be taking a big step in mitigating the risk. As an alternative to traditional investment methods such as stocks, bonds, savings accounts, etc. crowdlending in itself is already a way of diversifying. Within crowdlending, you will find many investment categories to differentiate. You can also differentiate between foreign currencies, countries, loan or project type, and lending small amounts to multiple borrowers.

• Low entry barriers

Another benefit of investing in crowdfunding is that the entry barrier is very low compared to other forms of investment such as stocks and bonds. With as small amount as EUR 1, you can access the crowdlending marketplaces from the comfort of your mobile phone or computer at home. This means that even investors with limited financials can start up their crowdlending investment.

• Zero investment fees

Unlike investing in bonds and stocks, funds, or other investment forms, there no fee for investing in crowdlending.

• Early exit is possible

Say something has happened to you and you want to withdraw part of your investment. This is totally possible in crowdlending unlike in the stock market. With the help of the secondary market, it is possible for you to exit by selling out your investment.

• Stable cash flow

The borrowers in crowdlending pay back the loan interest on a monthly basis, which means you will be receiving income every month as if you were employed.