The global payday loan market was valued at $32.43 billion in 2020. The global payday loan market is forecast to grow at a CAGR of 3.9% during the forecast period from 2021-2027.
In general, payday loans are short-term unsecured loans that often carry high-interest rates. It is an option in which the borrower writes a check to the lender for a portion of his payday salary but gets instant access to part of that sum as cash. Additionally, approval is easy as there are very few requirements such as the borrower must be 18 years old or older, have a job, driver's license, and a bank account, thus making a larger number of people eligible for it.
Factors Affecting the Global Payday Loan Market
Covid-19 Impact on the Global Payday Loan Market
Due to millions of unemployed people and financial hardship in the post-Covid-19 world, the global payday loans market is expected to decline. Payday loans are only available to employed people who have a regular income. Furthermore, the decline in government programs for payday loans, and decreasing support provided by NGOs to the unemployed and low-income earners, negatively impacts the growth of this market.
According to a report by the state's Department of Financial Protection and Innovation, California saw a substantial drop in payday loans in 2020, dropping by 40% compared to 2019. The number of people not relying on payday loans fell by 30% in comparison to 2019. The reason for this can be attributed to California's new $262.6 billion budget, which contains multiple programs designed to reduce income inequality in the state. There is also an unprecedented $11.9 billion set aside for Golden State Stimulus payments.
Regional Analysis of the Global Payday Loans Market
As of 2020, North America dominated the payday loan market, and this trend is likely to continue throughout the forecast period. The market for payday loans is predicted to increase shortly due to a variety of factors, including youth penetration and improvement in the economy. There are also numerous payday loan vendors in the US and Canada, which means there are lucrative opportunities for the market.
However, during the forecast period, Asia-Pacific is expected to experience significant growth, thanks to the prevalence of large numbers of payday loan businesses that are opting for digital solutions to manage their business processes more efficiently, especially in developing nations such as China, India, and Singapore.
Key Players in the Global Payday Loan Market
Several competitors in the global payday loan market are:
Aim of the Report: The Global Payday Loans Market
The payday loan market is segmented by Customer Age, Marital Status, Type, and Region.
Segmentation based on Customer Age
Segmentation based on Marital Status
Segmentation based on Gender
Segmentation based on Type
Segmentation based on Region