Market Insights Financial Capital Raising Digital Capital Raising

CrowdLending (Business) - South Korea

South Korea

The total transaction value in the Crowdlending (Business) market market in South Korea is expected to reach €36.1m in 2024.
When comparing globally, it is evident that China leads with a transaction value of €14,810m in 2024.
South Korea's CrowdLending market is burgeoning as tech-savvy investors seek higher returns in the Capital Raising sector.

Key regions: United States, Singapore, Brazil, Europe, Germany

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Analyst Opinion

The CrowdLending (Business) market in South Korea has been experiencing significant growth in recent years.

Customer preferences: South Korean businesses have shown a strong preference for CrowdLending as a source of funding. This can be attributed to several factors. First, traditional funding options such as bank loans can be difficult for small and medium-sized enterprises (SMEs) to obtain due to strict lending criteria. CrowdLending provides an alternative avenue for these businesses to access capital. Second, the convenience and speed of the CrowdLending process appeals to businesses in South Korea. The online platforms allow borrowers to easily submit loan applications and receive funding within a short period of time. Lastly, the competitive interest rates offered by CrowdLending platforms make it an attractive option for businesses looking to secure financing.

Trends in the market: One of the key trends in the South Korean CrowdLending market is the increasing participation of institutional investors. Initially, CrowdLending platforms primarily attracted individual investors. However, as the market has matured, institutional investors such as banks and asset management companies have started to enter the space. This trend is driven by the potential for higher returns compared to traditional investment options. Additionally, the involvement of institutional investors brings a level of credibility and stability to the market. Another trend in the South Korean CrowdLending market is the emergence of specialized platforms catering to specific industries or types of businesses. This allows borrowers to access funding that is tailored to their specific needs. For example, there are platforms that focus on providing loans to startups or businesses in the technology sector. This specialization not only benefits borrowers but also provides opportunities for investors to diversify their portfolios.

Local special circumstances: South Korea has a strong entrepreneurial culture, with a high number of startups and small businesses. However, traditional funding options for these businesses are often limited. CrowdLending platforms fill this gap by providing access to capital that may not be available through traditional channels. Additionally, the South Korean government has been supportive of the CrowdLending industry, implementing regulations to ensure transparency and protect the interests of investors and borrowers.

Underlying macroeconomic factors: The growth of the CrowdLending (Business) market in South Korea can be attributed to several macroeconomic factors. Firstly, the low interest rate environment in the country has made borrowing more affordable for businesses, increasing the demand for funding. Secondly, the digitalization of financial services has made it easier for businesses to access CrowdLending platforms and for investors to participate in the market. Lastly, the strong economic growth in South Korea has created a favorable business environment, leading to increased demand for funding from SMEs. In conclusion, the CrowdLending (Business) market in South Korea is experiencing significant growth due to customer preferences for alternative funding options, the emergence of institutional investors, specialized platforms, the entrepreneurial culture in the country, and favorable macroeconomic factors.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on transaction values / revenues / assets under management and user data of relevant services and products offered within the FinTech market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending, population, internet penetration, smartphone penetration, credit card penetration, and online banking penetration. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.