European P2P to grow by 7pc by 2025

The European peer-to-peer lending market is set to grow by seven per cent by 2025, thanks to further developments in artificial intelligence (AI) and decentralized finance (DeFi).

According to a new analysis by Croatia-based P2P lending platform Robo.cash,  technological advances will have a major influence on funding volumes in the European P2P market in the year ahead.

“Improvements in AI products are leading to their increased use in the P2P market, which enhances the customer experience of the platforms and brings in new investors,” said Robo.cash analysts.

“The merger of DeFi and P2P lending allows users to bypass traditional barriers, providing transparency and accessibility.

Read more: Healthcare and IT investment can push P2P market to double in five years

“At the moment, the number of such platforms is not large, but it is gradually growing.”

Robo.cash analysts calculated that the contribution of AI and DeFi development to the Europe P2P market is expected to reach €95.1m (£81.31m) in 2024, highlighting its growing role in the fintech lending space.

“Overall, the combination of AI and DeFi in the P2P market can promote financial inclusion and foster innovation in the lending space,” said the platform’s analysts.

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“However, challenges such as regulatory concerns, and technological risks need to be addressed to fully leverage the potential benefits of these technologies.”

In 2023, AI finance in Europe reached a value of €12.81bn in 2023, which is 5.8 times more than in 2017.

Robo.cash found that the decentralized finance market showed an average annual decline of 1.7 per cent last year, although its volumes are expected to grow in 2024, driven by new regulation of decentralized finance as well as growing interest in cryptocurrencies.

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