Funding Circle Limited: Empowering Micro Businesses and Fueling Growth in US Micro Lending Market

 Funding Circle Limited is one of the leading players in the US micro-lending market with a global presence in countries like the United Kingdom, Germany, and the Netherlands. Funding Circle Limited has helped ~1,18,000 businesses worldwide with a loan distribution of $1.13 Bn.

STORY OUTLINE

• The company recorded a revenue of $155 Mn in the year 2022 with a working strength of 1100 employees.
• In 2022 alone the company allotted $2Bn amount of credit to small and medium-sized businesses.
• Recently, the company raised $37 Mn of venture capital funding from another micro-lending institution named Accel Partners.

According to Ken Research: America is one of the world’s biggest markets for micro-lending with a significant market value. In America, there are a total of 80 Mn active customers in the micro-lending market which includes 50% of female clients. Funding Circle Limited is one of the market leaders in the US micro-lending market with a strong presence over the country. Currently, the company serves around 1,18,000 small and medium-sized businesses.

1.Overview of Funding Circle Ltd.

• Funding Circle was founded in the year 2010 by three partners Sameer Desai, James Meekings, and Andrew Mullinger. The company offers products such as Business Loans and Commercial and Industrial Loans for small and medium-sized enterprises.
• The company recorded a revenue of $155 Mn in the year 2022 with a working strength of 1100 employees.
• The company’s headed by CEO Sameer Desai and it headquarter is located on Queen Victoria Street, London, United Kingdom.
• The company spends 3% of its earnings on the CSR (Corporate Social Responsibility) fund annually.

2.Funding Circle’s Position in US Micro Lending Market

• Funding Circle Limited is one of the major players in the US micro-lending market. The company has distributed ~$19 Mn in small loan amounts to small and medium-sized enterprises across the country.
• In 2022 alone the company allotted $2Bn amount of credit to small and medium-sized businesses which was a record for the company.
• The company has ~$3 Bn outstanding loans under management globally and it has sustained ~1,00,000 jobs in 2022.

Click here:- Amount of credit provided by Funding Circle

3.Major Competitors of Funding Circle in the US Micro Lending Market

• On Deck Capital Inc, American Express Kabbage Inc, LendingClub Bank, Zopa Bank Limited, Biz2Credit Inc., Lendio Inc., Bluevine Capital Inc., Fundera Inc. (NerdWallet), and StreetShares Inc are some of the major players of the US micro-lending market.
• The American Express Company unveiled a line of financial service products for microbusinesses in 2022. The business has experienced tremendous returns of 70% over the past three years.
• Lendio Inc. has unveiled a new mobile app with capabilities like access, analytics, and capital analysis to help small businesses.

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4.Expansion of Funding Circle in the US Micro Lending Market

• Recently, the company raised $37 Mn of venture capital funding from another micro-lending institution named Accel Partners. This funding circle is to grow the business in US micro-lending market and expand the range of products its offers.
• In 2020. The company raised another $100Mn from several investors like Baillie Gifford, DST Global, Index, Ventures, Ribbit Capital, Rocket Internets, Sands Capital Ventures, and Temasek.
• Funding Circle raised $65 Mn from its equity shares to further strengthen its international growth of marketplace lending.

5.Market Strategies of Funding Circle in the US Micro Lending Market

• The target audience for Funding Circle is small and medium-sized enterprises that require frequent funds to support their business and other activities. The company has supported around 20% of country SMEs in 2022.
• The company worked together with government agencies during the time of covid-19. The company helped many SMEs during the pandemic from the bankrupt situation and lends ~2 Bn loan amount in 2020 alone. It was one of the largest lenders during the pandemic under the CBILS (Coronavirus Business Interruption Loan).
• The company is planning to diversify its customer base as it has announced to distribute loans to individual proprietors, medical patients, and farmers from next year.

Conclusion

Within the dynamic landscape of US micro-lending, Funding Circle has developed as a frontrunner, encouraging the desires of small and medium-sized ventures. With an exceptional presence crossing nations and a commitment to corporate social responsibility, Funding Circle's journey is stamped by development and impact. The company's considerable loan distribution of $1.13 billion to over 118,000 businesses globally stand as a confirmation of its viability. As Funding Circle proceeds to grow its impression and offerings, its collaboration with government offices amid the pandemic and plans to expand clientele highlight its part in driving financial flexibility. With visionary leadership beneath CEO Sameer Desai, Funding Circle's commitment to businesses' development and well-being is reshaping the forms of micro-lending, cultivating a flourishing environment for business people over the United States.

US Micro Lending Market Thrives with 30% Growth, Innovative Solutions, and Inclusive Access

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The US Micro Lending market is expected to grow at a CAGR of 12 % from 2022 to 2028. The market is driven by growth drivers like low-interest Rates, Unbanked population, Ease of Access, Technological Advancements, flexible repayment schedules, and Alternative credit score models.

STORY OUTLINE

• During the Covid-19 Pandemic, the US micro-lending market added 45 Mn new borrowers through digital platforms.
• The number of loan accounts in the US micro-lending market increased significantly by 20% in 2022.
• 60% of the rural population of America prefers micro-loans due to lower interest rates in the country.

According to Ken Research, America is one of the world’s biggest markets for micro-lending with a significant market value. In America, there are a total of 80 Mn active customers in the micro-lending market which includes 50% of female clients as of 2022. The market generates an investment of $100 Mn on average every month. In 2022, the US micro-lending market has the presence of more than 2200 micro-finance companies.

1. Impact of the Pandemic on the US Micro Lending Market

• The global pandemic of covid-19 had a moderate impact on the US micro-lending market. However, the micro-lenders faced a few difficulties such as meeting customers in person, difficulties in the collection of payments, and problems in allocating loans.
• In the year 2021, The US micro-lending market added 45 Mn new borrowers through digital platforms. The US micro-lending market provides micro-loans to around 60% of small and medium-sized enterprises during the economic downfall of the pandemic in 2020.
• The US micro-finance sector witnessed a sudden increase in demand for micro-loans post-pandemic. In 2022, the market added a new 40% of customers and MFIs (Micro Finance Institutions) expanded their product list by bringing new and innovative products or services.

2. Current Scenario of the US Micro Lending Market

• The US Micro Lending Market is leading the global micro-lending market and is projected to grow at a CAGR of 12% between 2022-2028.
• The US Micro Lending Market grew by 30% in 2022 in comparison to the previous year.
• The number of loan accounts in the US micro-lending market increased significantly by 20% in 2022.
• In 2022, the US micro-lending market created a new record by opening 30 Mn micro-loan accounts.

3. Growth drivers of the US Micro Lending Market

• In America around 6 Mn of Individuals don’t have a bank account. Micro-Lending institutions came to the rescue of these individuals by providing them with small credits and monetary services.
• Other variables influencing the US micro-lending market are lower interest rates and ease of access. 60% of the rural population prefers micro-loans due to lower interest rates in the country. And 30% of the population finds it easy to access through digital platforms compared to traditional banking services.
• Technological advancements and Alternative credit score models have played a crucial role in cultivating the growth of this industry. Instead of checking credit history MFIs go through the customer’s educational background, social media behavior, and employment history.

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 4.Major Players of the US Micro Lending Market

• funding circle limited, On Deck Capital Inc, American Express Kabbage Inc, Lending Club Bank, Zopa Bank Limited, Biz2Credit Inc., Lendio Inc., Bluevine Capital Inc., Fundera Inc. (NerdWallet), and Street Shares Inc are some of the major players of the US micro-lending market.
• In 2022, American Express Company announced a suit of financial service products for micro-enterprises. The company has witnessed huge returns of 70% in the last three years.
• Financing Circle extended its access to capital for Nevada small business proprietors taking after authorization from the state.
• Additionally, Lendio Inc also introduced a new mobile app to assist small enterprises with features like access, data, and insight into their capital.

Conclusion

The US micro-lending market has shown remarkable growth in recent years. The market witnessed a growth of 30% with 30 million micro-loans accounts in 2022 despite facing global pandemic and restrictions. The market has 80 million dynamic clients including 50% women and the industry receives $100 Mn monthly investment from its huge customer base. The pandemic helped the market to strengthen its digital presence as the market recorded 45 Mn borrowers from online platforms. This also shows how the market is innovating and developing. The micro-finance market of the US served 60% of SMEs during the global crisis and enhance the products post-pandemic. The market is driven by the Unbanked population, lower interest rates, and developed credit models. Market leaders like American Express and Funding Circle are strengthening the market even more by expanding the business globally.