The “Research & Markets” report predicts a 39.9% growth for the UAE alternative lending market in 2023, reaching $337 million compared to $240.9 million in 2022.
The market is further expected to grow to $764.3 million by 2027, with a compound annual growth rate (CAGR) of 22.7% between 2023 and 2027.
The Growth for the UAE alternative lending market is attributed to several factors, including:
- Low credit penetration rate in the UAE: This indicates unmet demand for credit.
- Favorable regulatory environment: Supportive regulations in the UAE foster the growth of alternative lending.
- Confidence from venture capital firms: Investors see strong growth potential in the alternative lending sector.
Several factors are expected to contribute to further growth in the UAE’s alternative lending market:
- Entry of fintech companies: Increased competition and innovation through new products and services.
- Mergers and acquisitions: Consolidation among alternative lenders, strengthening capabilities and market reach.
- Rising demand for mortgages: Driven by increasing property prices in the UAE.
- Growing adoption of “buy now, pay later” (BNPL) schemes: Offering flexible payment options for consumers, potentially leading to higher demand for consumer loans.
The Emirate of Dubai continues to enhance its attractiveness and gains in the tourism and travel sector, as one of the most prominent and sought-after destinations in the world. Demand levels for Dubai are increasing, and are higher by 10% during the last quarter of 2023. pic.twitter.com/585a23Rzlh
— UAE Voice (@uae_voiceeng) December 24, 2023
Analysis
The report paints a positive picture for the future of the UAE’s alternative lending market.
Besides the expected market growth, the report highlights several factors that will fuel this growth.
One of the most significant factors is the entry of fintech companies.
These companies have the potential to disrupt the lending landscape by offering more efficient and customer-friendly products and services.
Additionally, rising property prices in the UAE create another factor supporting market growth.
Increased demand for mortgages will lead to higher demand for alternative lending options, such as mortgage loans.
Finally, the growing adoption of BNPL schemes also contributes to market expansion.
This system provides consumers with flexible payment options, potentially increasing demand for consumer loans.
The UAE’s alternative lending market is a nascent market with significant growth potential.
The factors mentioned above indicate that the market is likely to continue expanding in the coming years.
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