Online lending market shrinks in Switzerland

Decline in credit volume on online platforms in 2023 Keystone-SDA

Credit granted in Switzerland via online platforms declined by 11% to CHF18.6 billion in 2023, according to an academic study.

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The latest figures bucks the mid-term trend of volumes for this type of credit increasing 240% over the past five years, points out a study published by the Lucerne University of Applied Sciences and Arts (HSLU) and the Swiss Marketplace Lending Association (SMLA) released.

At CHF13.2 billion, online loans and credits to large companies, SMEs and public-sector entities accounted for around 70% of total volume last year. However, this volume fell by 7%.

Online loans have also become an important financing pillar for public-sector entities, with an estimated market share of around 15%, the report shows.

20% fewer mortgages

The online mortgage brokerage business fell by 19%. This was primarily due to a change in the interest rate environment and strategic adaptations by certain platforms, it says.

Some mortgage brokers have left the traditional retail market or adapted their business model. For 2024, experts expect stagnation or even a slight decline, but the long-term outlook for this segment is positive.

The crowdlending segment also suffered a decline of 20%. According to the study, this segment has had a difficult few years: the Covid-19 pandemic was followed by economic uncertainties and a rapid rise in interest rates. Despite isolated credit losses, investors would have achieved an average return of 3% over the last eight years after deducting losses and costs.

Translated from French by DeepL/mga

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