Croatia-based peer-to-peer lending platform Robo.cash has predicted that a number of small new lending platforms will enter the European P2P market over the next year or two, bringing about a change in the dynamics of the marketplace.
According to data analysis from P2PMarketData.com, Robo.cash found that around 80 per cent of the entire European consumer and business lending market belongs to just 10 P2P platforms, indicating a high market concentration.
These larger players have been able to maintain their positions over the past few years, making it harder for competitors to push for significant structural changes.
However, Robo.cash’s analysts noted that the sphere of P2P investments is becoming more demanding, and smaller platforms are better placed to adapt to these changing dynamics.
These smaller platforms may enter the market as subsidiaries of larger financial groups, in order to reduce the risks of platform failures.
“Interestingly, the number of platforms working within financial groups has increased,” Robo.cash added.
“In the face of growing uncertainty, launching a platform as a part of the group might reduce the risks when entering a new market.”
The research found that the majority of European P2P platforms launched between 2013 and 2016. From 2017 to present, the emergence of new platforms has slowed down.
“Future development of the European P2P lending market will be primarily driven by existing platforms rather than new players,” said the Robo.cash analysts.
“Market concentration will continue to weaken gradually as the coronavirus crisis made many P2P platforms with small market shares competitive enough to be able to change their positions in the market.”