Market Trends of Europe Crowd Lending And Crowd Investing Industry
High Proliferation of Smartphones Combined with Vendor Efforts to Appeal to the Younger Population will Drive the Market
- The high proliferation of smartphones in many European countries, coupled with the increasing efforts from the market vendors to appeal to the Younger Population, is analyzed to influence the market growth in the region positively. Vendors in the market studied have been increasingly using smartphones to complete KYC and ensure they acquire new borrowers remotely; digital advertisement spending from these vendors is expected to be centered around smartphones for various reasons.
- With the growing 5G investments, the global smartphone demand has increased significantly. Technological advancements, such as 5G, are expected to augment Europe's smartphone numbers further. For instance, According to Ericsson, the number of 5G subscribers in Europe stood at 64.36 million and is projected to grow to 408.21 in two years.
- With increased access to high-speed internet, the demand for mobile-based solutions is expected to be spearheaded over the coming years. With the proliferation of smartphones and digital initiatives, the demand for mobile-based financial services is expected to grow faster over the coming years, enhancing the need for Crowd lending and investing in the region.
- Additionally, Europe is expected to rise in the number of smartphone users. Moreover, digital initiatives, such as 5G deployment and the developing digital infrastructures, like smart cities and smart homes, have increased demand. For instance, according to the data from GSMA, mobile subscription in Europe is expected to grow to 480 million in two years. Further, there will be 311 million 5G connections across Europe in two years, a 44% adoption rate.
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CEE Countries to Witness Significant Growth
- Crowdfunding platforms witnessed significant growth in CEE Countries such as Latvia, Bulgaria, Estonia, etc., over the last few years. Various business models have been initiated, starting from philanthropic activities and ending with financing companies and personal needs. More companies are expected to join the ecosystem with clear and transparent policies for their customers. Countries in the CEE will become particularly appealing for crowdfunding due to the development requirements and the higher capital costs compared to the Western European ones. Fagura is a company that validated its crowd-lending model in Moldova, and it is currently seeking to enter the Romanian market and the broader CEE region.
- The CEE region mainly relies on banks and micro-lenders on the borrowing side and loan marketplaces on the investor side. In recent years, crowdfunding has been acclaimed as an untapped and vast new opportunity for entrepreneurs and startups with challenges in obtaining funding from traditional methods. Moreover, demographic and social changes, rapid urbanization, and a shift in economic power are contributing to the evolution of the digital lending industry. Such trends have helped crowdfunding attract market players across the region.
- Peer-to-peer lending or P2P lending is the major crowdfunding business model in the European region, with the UK leading the top, followed by France and Germany. The demand for P2P lending creates an opportunity for companies to enter into the CEE countries as these countries have a strong hold on software development and cybersecurity. The high ROI crowd lending platforms in Europe are expected to drive the studied market in the CEE countries. For instance, according to the data from Crowdspace, crowdlending platforms can offer 13% ROI in Europe, with platforms such as Crowdestor offering 18% ROI.
- Similarly, a handful of real estate crowdfunding platforms in Estonia offer global and domestic real estate investment options from as low as USD 50. Estateguru and Crowdestate stand as two of the largest and longest-standing platforms. Estateguru funded over USD 665 million in projects, with Crowdestate funding nearly USD 130 million. Hence, this kind of investment in the CEE region drives the European crowdlending and Investing market.
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