Micro Lending Market (By Provider: Banks, Micro Finance Institutes (MFIs), NBFCs (Non-banking Financial Institutions), Others; By End users: Solo Entrepreneurs & Individuals, Micro Enterprises, Small Enterprises) - Global Industry Analysis, Size, Share, Growth, Trends, Regional Outlook, and Forecast 2023-2032

The global micro lending market size was exhibited at USD 186.79 billion in 2022 and is projected to hit around USD 379.44 billion by 2032, growing at a CAGR of 9.26% during the forecast period 2023 to 2032.

Key Pointers:

• By provider, the banks' segment has contributed a market revenue share of over 57% in 2022.
• By End-user, the micro, small, and solo segments contributed a market revenue share of around 70% in 2022.
• The Asia Pacific region has held the highest revenue share of around 29% in 2022.

Micro Lending Market Report Scope

Micro lending is a small loan provided by lenders to businesses and individuals for enabling these companies to manage their expenses. The growth of the industry can be attributed to the growing adoption of microfinancing. For instance, according to the 2019 report of Microfinance Barometer, almost 140 million borrowers are micro-financed by microfinance institutions worldwide with an estimation of total loan portfolio of USD 124 billion.

The lucrative benefits of micro lending to both borrowers and investors are anticipated to drive the growth of the market over the forecast period. The benefits to the micro lending borrowers include little to no collateral for the loan along with secured micro financing. In addition, borrowers which do not qualify for traditional loans are also benefitted with micro lending as it offers quick & secure financing options to all such borrowers. Moreover, the micro lending investors are also benefited as they gain the ability for passive investment through investing via digital platforms and collect high interest compared to other fixed-income securities.

Loans within USD 50,000 can be considered microloans. Thus, the companies requiring such small loans demand for micro lending platforms. The increasing number of small businesses across the globe is one of the major factors creating demand for micro lending services. For instance, in 2022, according to the U.S. Small Business Administration (SBA), nearly 33.2 million small businesses are present in the U.S., which consists of 99.9% of U.S. businesses. Moreover, the individuals requiring micro-loans demand peer-to-peer financing which is also anticipated to drive the growth of the industry over the forecast period.

Moreover, the increasing investments by venture capital firms into the micro lending providers are also expected to drive the growth of the micro lending market over the forecast period. For instance, in November 2019, BlueVine Inc., a financing solutions provider to SMEs, announced that it had raised USD 102.5 million through a Series F round of equity financing. The round was led by ION Crossover Partners with all other existing investors, including Menlo Ventures, Lightspeed Venture Partners, SVB Capital, 83North, and Nationwide. The funds were used to create an end-to-end banking platform that included a business checking account that was easily connected with Bluevine's technology-enabled range of online financing products.

Furthermore, though the micro lending market is on the surge, some of the challenges might restrain the growth of the market. The challenges in micro lending, such as the short time for repayment provided by microlenders and high interest on small amounts, are expected to hinder the market's growth over the forecast period. Moreover, factors such as the inability of micro lending investors to recover losses owing to the defaulter borrowers also restrain the growth. Nevertheless, the adoption of advanced technology such as artificial intelligence having the capability of identifying the creditworthiness of customers is anticipated to reduce the rate of defaulter borrowers in the near future.

Asia Pacific accounted for over 27.0% of the global revenue share. The regional growth is attributed to the growing number of start-ups across the region. For instance, according to Startup India Hub, India ranks 3rd as the largest startup ecosystem worldwide which is estimated to witness a consistent Year-on-Year annual growth of 12% to 15%. The total number of startups across India stood at around 65,861 in March 2022. Such a growing number of startups create demand for micro lending, thereby fueling the regional growth. Moreover, several government initiatives and policies implemented in the countries such as Japan and Australia to provide ease in getting small loans to SMEs and entrepreneurs are driving regional growth.

Latin America is expected to expand at a significant CAGR in the forecast period. The growth can be attributed to the increasing number of micro lending platform providers across the region. Furthermore, in 2020, through The United Nations Environment Programme (UNEP) farmers in Latin America have leveraged microfinancing to fight climate change. In addition, the market players in Latin America are also expanding their micro lending solutions to help customers during the pandemic. For instance, in March 2022, Mibanco utilized FICO Platform’s Decisions Capability to enhance its lending capacity and adjust according to changing market conditions during the pandemic.

Some of the prominent players in the Micro Lending Market include:

• Accion International
• Bajaj Finserv Ltd.
• Bandhan Bank Ltd.
• Bluevine Inc.
• Equitas Small Finance Bank Ltd.
• ESAF Small Finance Bank
• Fincare Small Finance Bank Ltd.
• Fusion Micro Finance Ltd.
• HDB Financial Services Ltd.
• ICICI Bank Ltd.
• Kiva Microfunds
• Larsen and Toubro Ltd.
• Lendio Inc.
• Lendr.Online LLC
• Oakam Ltd.
• On Deck Capital Inc.
• Panamax Inc.
• Small Industries Development Bank of India
• Ujjivan Small Finance Bank Ltd.

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2032. For this study, Nova one advisor, Inc. has segmented the global Micro Lending market.

By Provider

• Banks
• Micro Finance Institutes (MFIs)
• NBFCs (Non-banking Financial Institutions)
• Others

By End users

• Solo Entrepreneurs & Individuals
• Micro Enterprises 
• Small Enterprises

By Region

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East & Africa (MEA)