Global Micro Lending Market to Grow at a CAGR of 13% during 2024-2032, Aided by Partnership Between Banks and Microfinance Institutes

Micro lending is a popular means of financing, to aid economically weaker sections of society, or small business owners, or solo entrepreneurs, which is driving the industry growth. With commercial banks expanding their services in micro financing, the industry is growing steadily. Banks are increasingly drawn by lower risks, stability and potential growth opportunities in the micro lending industry. Furthermore, partnerships between microfinance institutes and banks are leveraging growth prospects for both the firms, thus, further invigorating market growth. Such integration is capturing a wider population as microfinance institutes have a greater knowledge about the needs of borrowers and banks have a huge capital base. Moreover, with technology being coupled with finance, the operating cost comes down as transactions become simple, thereby enabling increased investments in micro lending sector, hence, augmenting market growth.

The market is furthered by the various expansion strategies employed by several banks, such as HDFC Bank Limited (NYSE: HDB) and ICICI Bank Limited. In addition, the Microfinance Institutions Network (MFIN), India, in collaboration with KPMG announced the release of a special report, titled ‘Rejuvenating Microfinance in India- Embracing Digital’ in March 2021. The report documented the outreach of microfinance in India, thus strengthening the industry growth in the region. Further, with embracing technology, almost 100% of disbursements are now cashless and institutions are increasingly using data-driven predictive analysis to support business decisions and insights, thereby reducing operation costs, ease of transactions, and promoting digital literacy, owing to which the microfinance industry is surging. Efforts by the MFIN are now directed at maintaining a customer-centric approach coupled with technological upgrades to focus on fast loan origination and efficient customer services. These factors are thus augmenting the market growth of micro lending.

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Market Analysis by Provider, End-User, and Region:

• Based on providers, the market is divided into banks, micro-finance institutes, and NBFC (Non-Banking Finance Institutes), among others.

• On the basis of end-use, the market is segmented into small enterprise, micro enterprise, and solo entrepreneurs and self employed.

• The major regional markets for micro lending are North America, Latin America, Europe, the Asia Pacific, and the Middle East and Africa.

Key Findings of the Report:

• Micro lending firms to provide growth opportunities to micro, small and medium enterprises (MSME) aid in the economic development of the country, hence aiding market growth.

• The industry is aided by government campaigns like Make in India, which provides favourable growth opportunities, thereby, adding to the industry growth.

• Digitisation of finance provides for better security, ease of access, and reduces operational cost, thus boosting micro lending industry growth.

• A partnership between banks and microfinance institutes is bolstering market growth as microfinance institutes have a greater knowledge about the needs of borrowers and banks have a huge capital base.

Key Offerings of the Report:

• The EMR report gives an overview of the global micro lending industry for the periods (2018-2023) and (2024-2032).

• The report also offers historical (2018-2023) and forecast (2024-2032) markets for providers, end-users, and major regions of micro lending.

• The report analyses market dynamics, covering the key demand and price indicators in the market along with an assessment of the SWOT and Porter’s Five Forces Model.

The major players in the global micro lending market are BlueVine, Inc., Kabbage, Inc., StreetShares Inc., On Deck Capital, Inc., and, Lendio, Inc., among others. The comprehensive report by EMR looks into the market share, capacity, and latest developments like mergers and acquisitions, plant turnarounds, and capacity expansions of the major players.

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