Robo.cash predicts 6% growth in P2P volumes for 2023
Robo.cash is predicting that the European peer-to-peer (P2P) lending market will grow 6% during 2023, to reach €3.3bn (£2.91bn) by the end of the year.
Robo.cash analysts considered three possible scenarios for the European P2P market, concluding that the most likely is that the market will see monthly growth rates of between 1.4% and 2%, resulting in 6% year-on-year growth.
The main ‘fuel’ for the market, Robo.cash analysts suggest, could be the gradually weakening profitability of competitive assets like stocks, bonds, and cryptocurrencies. Investors could redirect capital accumulated in 2020 and 2021 to bank accounts and other assets. To suppress high inflation, central banks will likely raise their rates. This could see global average key rates increase to 5.5% by the end of 2023. P2P players could take advantage of this opportunity and increase their appeal, Robo.cash agues.
A protracted global recession could lead to Robo.cash’s worst-case scenario for the European P2P market, with industry volumes reaching just €2.3bn in 2023, less than in the first year of Covid-19. A likely precursor to such a scenario would be a delayed reaction on the part of central banks to inflation and declining real incomes. This would force them to ‘uncover their savings’, the analysts suggest, causing all assets to decline. The risk of further geopolitical escalation could make matters worse.
In the best-case scenario, Robo.cash argues, European P2P would grow by between 2 and 6% per month in 2023, to reach €5bn by the end of the year, a 61% year-on-year increase.
Such an outcome could come about as a result of a slowdown in the growth of the DXY dollar index, which would open up the possibility of other currencies maintaining acceptable levels, the analysts argue. World inflation would peak by the middle of the Q2 next year, and then rapidly subside. This could result from a systematic, but significant, increase in key rates to reach 7.3% by the end of 2023. Other assets would still fall, but slightly less so than in the other two scenarios.