European peer-to-peer lending platforms will increasingly offer more loans in developing markets this year, with the demand rising due to the pandemic, analysts at Robocash have predicted.
The volumes of alternative lending in the developing countries have been increasing yearly by 25 per cent since 2017, and the funding from European investors has been an important contributor to this trend.
According to the Cambridge Centre for Alternative Finance, 31 per cent of the alternative financing in Europe is cross-border transactions, with 22 per cent of these going towards Asia.
Robocash said Covid-19 has further boosted the demand for additional funding in the developing regions. At the end of the first half of 2020, the Asia-Pacific region lost about 17 per cent of the volume of transactions in alternative lending compared to the same period in 2019.
Read more: Robo.cash hits €200m lending milestone
“The reason was a more powerful impact of the pandemic than in the rest of the world,” Robocash said.
“At the same time, this suggests heavy underconsumption, which should result in significant growth of alternative lending in the region in 2021.
“In light of this, the European P2P platforms will offer increasingly more loans originating from the developing countries.”
Robocash predicted the merging of traditional banking and alternative lending to become a prominent trend this year amid the economic uncertainty.
“Banks can take advantage of the flexibility of alternative lenders, whereas the latter can get another reliable channel for attracting clients and increase their reach,” the platform said.
“2020 saw quite a few examples of merging between the two institutions, and its positive effect is predicted to accelerate the trend this year.”