P2P Lending Market Overview by Region

P2P lending has become increasingly popular in recent years, and is now
available in many countries around the world. Some countries where P2P
lending has become popular include:

* CAGR: Compound Annual Growth Rate (1)

● In North America, the P2P lending market share is the largest in terms
of revenue and has grown rapidly in recent years, with the United
States being the largest market in the region. Since 2005 this industry
has been highly regulated, and lenders and borrowers must obey four
main areas of loan options and terms.
 + The first is the regulation on the limit of funds raised. Accordingly,
a P2P company can only raise a maximum of 1.07 million USD
each year from investors, except in special cases where separate
permission is required.
+ The second is the regulation on the limit of individual investment
in which the investment limit for an individual is calculated as the
total amount of investments made by the investor within 12
months and there is no exception for foreign currency. The
investment limit is determined based on the annual income or
net assets of the investor.
+ The third is the licensing and operational standards for P2P
companies - must follow standards of the US Securities and
Exchange Commission (SEC).
+ The fourth is the standards and requirements for public
disclosure of information for P2P companies.

The growth of the market has been driven by the emergence of several
successful platforms, such as Lending Club and Prosper, which have
attracted large numbers of borrowers and investors. In addition, the
growing adoption of mobile and digital technologies has made it easier
for consumers to access and use P2P lending platforms.

● In Europe, the P2P lending market is also growing rapidly, but it is still
relatively small compared to the North American market. The United
Kingdom has the largest market in Europe, followed by Germany.
Annual volume of different business lending in the United Kingdom
(UK) from 2012 to 2020, by lender.
 The growth of the market in Europe has been driven by the same
factors as in North America, as well as by a lack of access to traditional
credit for some segments of the population.

● In Asia-Pacific, the P2P lending market is in the early stages of

development, but it is the fastest growing market amongst all other
regions. China has the largest P2P lending market in the region, and it
has grown rapidly in recent years. Other countries in the region with
rapidly growing markets include India, Japan and South Korea.
+ In China: China’s first online lending platform, Paipaidai, was
launched in 2007. The P2P lending market had developed slowly
in the first few years. The number of operating P2P lending
platforms reached its peak at the end of 2015, with an
accumulative trading volume of more than RMB 1 trillion. Since
then, China has tried to regulate the P2P lending market by
establishing an innovative central-local co-regulatory regime
under which local regulators are incentivized to contribute to the
regulation of P2P lending in cooperation with the central
government. The number of operating platforms dropped
simultaneously to around 1000 in 2018, which was reduced by
more than 50% compared with the figure in the previous year
(Shown in the chart below)
+ In Malaysia: Since 2016, the Securities Commission (SC) has played
a key role in regulating the peer-to-peer lending model (as it is
considered a form of capital investment). The SC has issued strict
regulations in managing P2P companies, with some noteworthy
points such as an interest rate cap of no more than 18% per
annum, and only Malaysian companies with a minimum paid-up
capital of 5 million ringgit (about 1.2 million USD) are allowed to
provide P2P lending platforms and services.
+ In Vietnam: The Ministry of Planning and Investment (MPI)
warned Chinese P2P companies are moving operations to
Vietnam after its government tightened the credit environment.
From 2016 this kind of lending has occurred and spread rapidly
but still lower than other countries in Asia (1,6% (about 100
companies)) . According to the evaluation of the State Bank of
Vietnam, P2P Lending activities have many potential risks (credit
risks, information risks, anti-money laundering risks, cybersecurity
risks...) that could have negative and unstable impacts on social
welfare. While the current law does not have any provisions that
prohibit P2P lending, it can be determined that P2P lending, as a
contractual relationship, is subject to regulation by the provisions
on contracts in the 2015 Civil Code.
References:
https://www.alliedmarketresearch.com/peer-to-peer-lending-market
https://en.vietnamplus.vn/regulatory-sandbox-for-p2p-lending-needs-strict-
requirements/227518.vnp
https://vietnamnet.vn/en/p2p-loans-finding-favor-582700.html