Competition heats up for European P2P
The European peer-to-peer lending market is becoming more competitive, particularly when it comes to the consumer and real estate lending segments.
New research from Croatia-based P2P lending platform Robocash has found that the business loan market in Europe “tends towards monopoly”, while the other key P2P lending segments have become more competitive.
Geographically, Estonia is the country with the most competitive P2P landscape.
Using the Herfindahl-Hirschman index, Robocash analysts assessed the concentration of different parts of the P2P market. The index ranks values from 0 to 1, with 0 indicating low market concentration and high competition, and 1 showing high market concentration and tendency towards a monopoly.
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By the end of July 2023, the overall European P2P market ranking was 0.27, which indicates a high level of competition.
“Whereas in the early days the big players took a large share of the market, we now see the focus shifting towards increased competition,” said the Robocash analysts.
Business loans have a value of 0.47, which suggests high market concentration but fewer competitors. In 2017, P2P business loans had a Herfindahl-Hirschman ranking of 0.33, which demonstrates the growth of the segment.
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Meanwhile, Estonia appears to show the highest competitive environment among all European countries. The average concentration for the research period was 0.22.
“This can be explained by the maturity of the Estonian market,” said the analysts.
“Also, according to our latest research, the country is among the top three leaders in terms of platform stability and speed of reaching key milestones.”
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