The European peer-to-peer lending market is about to develop into more and more aggressive over the following yr due to “the expansion of promising platforms”, analysts have advised.
European platform Robo.money assessed the competitiveness of the European P2P sector utilizing the reverse Herfindahl-Hirschman index (HHI).
The HHI is a standard measure of market focus of an trade – the dimensions of corporations in relation to the trade they’re in – and is used to find out market competitiveness.
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If the worth of HHI (reverse) is larger than 8,500, then the market is taken into account extremely aggressive, if the HHI is lower than 7,500, then the market is taken into account extremely concentrated (or a monopoly).
Robo.money stated that the trade is experiencing excessive focus round key gamers that occupy greater than half of the market.
That is confirmed by the info, Robo.money stated, which confirmed that the typical HHI (reverse) from the start of 2017 to Might 2023 quantities to 7,095 factors.
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“In some unspecified time in the future, the exercise of the trade leaders led to a lower within the index and a rise of their monopoly energy,” stated Robo.money analysts.
“However the P2P market, like others, is topic to varied exterior occasions. With the Covid-19 [pandemic], market volumes declined and the HHI (reverse) rose, thereby opening the doorways to future competitors.”
The analysts predict that competitors out there will improve in 2024, as “the expansion of promising platforms will result in a lower within the chief’s market share.”
The European P2P sector goes by way of the following stage of its evolution, due to the introduction of recent pan-EU crowdfunding guidelines. The European Crowdfunding Service Suppliers Regulation (ECSPR) goals to harmonise the trade throughout the bloc, making it simpler for platforms to develop geographically and appeal to new prospects.