Embedded lending market to exceed USD 32.5 bln by 2032

Monday 5 December 2022 10:32 CET | News

US-based Future Market Insights (FMI) has conducted an analysis which shows the embedded lending market is expected to exceed USD 32.5 billion by 2032 due to fintech adoption rate.


The demand registered in the embedded market is expected to reach approximately USD 5.5 billion by the end of 2022, and USD 32.5 billion by 2032, at a compound annual growth rate (CAGR) of around 19.4% from 2022-2032.

Following the COVID-19 pandemic, millions of people all over the globe have been impacted, with business becoming bankrupt and the international economy being affected, thus having a substantial impact on several industries. Additionally, there was a widespread change from traditional to embedded lending among consumers and businesses alike, with the emergence of embedded lending models being driven by factors of the likes of company cashflow issues, fintech advancement, as well as challenger banks.

Being a type of funding that offers money, additional services, and a platform to businesses and individuals without requiring them to go to a ‘conventional’ bank, embedded lending is thought to bring forth a multitude of opportunities. Part of the capabilities embedded lending is believed to have, are those of boosting choice and competition, diversifying the financial industry, increasing economic inclusion, and diversifying the financial sector to further innovation across all financial related products and services. 

With firms having needed loans and other services for their operations, the usage of embedded lending has seen a demand increase, with the growth of the market having been propelled by the rise in digitalisation, fintech companies’ growth, and customer demand for quick and easy lending processes.

US-based Future Market Insights (FMI) has conducted an analysis which shows the embedded lending market is expected to exceed USD 32.5 billion by 2032 due to fintech.

Fintech’s’ involvement within the market

With the pandemic limiting mobility and accelerating digital technology adoption, fintechs have seen significant expansion within many financial services sectors, upending established procedures, and providing improved customer support and service. This expansion is thought to have been facilitated by a significand underserved and aspirational client base, a supportive regulatory environment, a thriving talent pool, funding access expansion, and public internet infrastructure. 

Although there was a pause in economic activity due to the pandemic’s restrictions, the fintech sector has seen continuous advancement when it comes to investment, adoption, and growth, with the advancement expected to continue further at an even faster pace, with fintech being one of the fastest-expanding sectors within the global financial services industry. Developed as a customer-focused innovation centre, fintech offerings are found in areas of the likes of payments, loans, insurance, wealth management, and brokerage and are provided in a simple, quick, and efficient manner, thus having disrupted markets, and changed how financial services are delivered. 

Customers are interested in having straightforward, all-encompassing experiences, with approximately 64% of consumers actively investigating the interest rate, EMI, and processing charge online prior to making a purchase. Linking digital platforms to a multitude of lenders, it helps ensure that customers are enabled to select from an extensive lenders’ network and to gain access to reduced interest rates, thus resulting in the expansion of the embedded lending market.

Embedded lending market key takeaways:

  • By solution, the embedded lending platform accounted for the highest market share in 2021, of approximately 2% for the embedded lending market. However, the segment for embedded lending services is expected to grow at a CAGR estimate of 18.1% through 2032.

  • By deployment, the on-premises segment had the highest market share of around 8% in the market in 2021.

  • By enterprise size, the large enterprises segment held the highest share of approximately 4% in the same period.

  • By industry, the education segment is expected to grow at a CAGR of around 3% between 2022-2032.

  • By region, in 2021 the largest market share was held by North America, with approximately 2%, however, during the forecast period, the South Asia and Pacific region is expected to show the highest growth of approximately 21.3 CAGR.

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Keywords: research, embedded finance, lending, fintech, banking, online platform, embedded payments
Categories: Banking & Fintech
Companies: Future Market Insights (FMI)
Countries: World
This article is part of category

Banking & Fintech

Future Market Insights (FMI)

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