Addressable Market Analysis for Consumer and Small Business Loans

Autonomous Research estimates the opportunity for digital lenders in the US alone to be at US$1 trillion, excluding mortgages. At present there are $4 trillion in outstanding consumer loans in the US, although not all of this is available to digital lenders and we estimate instead that there is addressable consumer opportunity of $500 billion. This amount consists of $200-$300 billion for student loans, which have been mispriced by the federal government, allowing borrowers to potentially qualify for a lower rate. Auto loans will contribute $100 billion in prime and near-prime from non-banks. There is an additional $150 billion in personal finance in non-subprime credit card balances over $10,000, where the borrower has cash flow to move to a three or five year amortizing loan.

Small businesses are a further opportunity for digital lenders, with $310 billion in sub-$1 million loans to small businesses and an additional $100 billion in demand.  This unmet demand is sourced from estimates by the US Federal Reserve Bank of NY, who claim there is an unmet credit demand resulting from banks unwillingness to make smaller loans.