{"id":13169,"date":"2026-11-10T08:44:50","date_gmt":"2026-11-10T08:44:50","guid":{"rendered":"https:\/\/getincome.com\/blog\/?p=13169"},"modified":"2026-11-10T17:04:33","modified_gmt":"2026-11-10T17:04:33","slug":"p2p-lending-private-credit","status":"publish","type":"post","link":"https:\/\/getincome.com\/blog\/p2p-lending-private-credit\/","title":{"rendered":"Where P2P Lending Fits in the Global Lending Landscape"},"content":{"rendered":"\t\t
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If you invest on Income Marketplace, you already invest in loans issued outside the traditional banking system: you acquire claims on loans issued by licensed Loan Originators. Most investors know this as P2P lending. But P2P lending is one part of a much larger market, and knowing where it sits helps explain where your returns come from and how the risks are structured.<\/span><\/p>

This is the first post in a new series on how P2P lending fits into the wider world of credit: how it compares with other ways of lending, who borrows, and how investor protections work. In this post, we zoom out. We look at how lending works today, which part of it happens outside banks, and where P2P lending fits in that picture.<\/span><\/p>

The short version<\/b><\/h2>

Banks have not been the only major source of credit for a long time. Non-bank lenders currently hold just over half of the world’s financial assets, and one of the fastest-growing parts of that world is private credit: loans negotiated directly between lenders and borrowers, outside banks and public bond markets. P2P lending, often described as a form of private credit, gives individual investors access to a market traditionally dominated by large institutions. On Income Marketplace, licensed Loan Originators issue the loans and set their terms; investors acquire claims on those loans by assignment and don\u2019t lend to borrowers directly.<\/span><\/p>

Lending no longer runs only through banks<\/b><\/h2>

For most of the last century, borrowing meant going to a bank. That is still true for many large loans: banks hold about 81% of all loan assets worldwide, according to the Financial Stability Board’s 2025 monitoring report. This includes large corporate loans and mortgages.<\/span><\/p>

But the wider financial system has shifted. At the end of 2024, non-bank financial institutions (pension funds, insurers, investment funds, finance companies and others) held 51.0% of total global financial assets, around $257 trillion. Their assets grew 9.4% in 2024, about twice the pace of banks.<\/span><\/p>

Two forces drove this. After the 2008 financial crisis, stricter capital rules made some types of lending less attractive for banks to keep on their books. At the same time, investors looking for income beyond savings accounts and government bonds were unable to step into that gap. Specialist lenders emerged to connect the two.<\/span><\/p>

Private credit: the umbrella category<\/b><\/h2>

Private credit is lending by non-bank lenders where the terms are negotiated directly with the borrower, rather than through a bank or a publicly traded bond. Because these loans are not traded on an exchange, there is no single official figure for the market’s size. Estimates for 2026 range from about $1.7 trillion to $3.5 trillion, depending on what is counted, and on any measure, the market has roughly tripled since the mid-2010s. Several forecasts see it approaching $4 trillion by around 2030.<\/span><\/p>

The main investors are institutions: pension funds, insurers, sovereign wealth funds and university endowments. They are drawn by a yield premium over public bonds, which they earn in exchange for accepting that their money is less liquid. Some of the world’s largest asset managers now run private credit books worth hundreds of billions of dollars.<\/span><\/p>

Private credit is not one market but a family of related strategies:<\/span><\/p>

Segment<\/span><\/p><\/th>

What it finances<\/span><\/p><\/th><\/tr><\/thead>

Direct lending<\/span><\/p><\/td>

Senior loans to mid-sized companies<\/span><\/p><\/td><\/tr>

Mezzanine and junior debt<\/span><\/p><\/td>

Higher-risk loans that rank behind senior lenders, for higher returns<\/span><\/p><\/td><\/tr>

Real estate and infrastructure debt<\/span><\/p><\/td>

Physical assets such as buildings, energy and transport<\/span><\/p><\/td><\/tr>

Asset-based finance<\/span><\/p><\/td>

Lending secured against receivables, equipment or other collateral<\/span><\/p><\/td><\/tr>

Distressed and special situations<\/span><\/p><\/td>

Companies in financial difficulty or going through restructuring<\/span><\/p><\/td><\/tr><\/tbody><\/table>

Private credit in Europe<\/b><\/h2>

Europe’s private credit market is smaller than the US market, but it is one of the fastest-growing in the world. European private credit reached about \u20ac450 billion in assets under management by the end of 2025. In the first nine months of 2025 alone, European private credit funds raised a record $65 billion, around 35% of all private debt raised globally in that period. Industry projections suggest the market could exceed \u20ac800 billion by the end of the decade.<\/span><\/p>

The main reason Europe has room to grow is that European companies still borrow mostly from banks:<\/span><\/p>
\u00a0<\/th>

Europe<\/span><\/p><\/th>

United States<\/span><\/p><\/th><\/tr><\/thead>

Bank share of corporate credit<\/span><\/p><\/td>

about 70\u201376%<\/span><\/p><\/td>

about 21\u201325%<\/span><\/p><\/td><\/tr>

Non-bank lending share<\/span><\/p><\/td>

about 12%<\/span><\/p><\/td>

about 75%<\/span><\/p><\/td><\/tr><\/tbody><\/table>

The same forces that built the US market are now at work in Europe. Banks have pulled back from some types of lending because of stricter capital rules, and specialist lenders are filling the gap. Public investment in infrastructure and defence is creating new borrowing needs, and a growing number of US asset managers and pension funds are building European private credit portfolios.<\/span><\/p>

Access for individual investors is also changing. Under the EU’s revised European Long-Term Investment Fund rules (ELTIF 2.0), which apply from 10 January 2024, retail investors no longer face the previous \u20ac10,000 minimum investment or the cap of 10% of their portfolio. The direction of policy is clear: private credit in Europe is gradually opening up beyond institutions.<\/span><\/p>

Where P2P lending fits<\/b><\/h2>

P2P lending shares the defining features of private credit. The loans are made outside banks; they are not traded on public markets, and investors earn interest in return for taking on credit risk and accepting that their money is committed for a set period.<\/span><\/p>

Within the family above, P2P lending sits closest to asset-based finance. When you invest on Income Marketplace, you acquire claims on loans issued by Loan Originators: specialist lenders that provide consumer and business loans in their own markets. Your return comes from the repayments on those loans.<\/span><\/p>

The real difference lies in access and packaging:<\/span><\/p>
\u00a0<\/th>

Institutional private credit<\/span><\/p><\/th>

P2P lending<\/span><\/p><\/th><\/tr><\/thead>

Typical investor<\/span><\/p><\/td>

Pension funds, insurers, endowments<\/span><\/p><\/td>

Individual investors<\/span><\/p><\/td><\/tr>

How you invest<\/span><\/p><\/td>

Commitment to a fund, often with high minimums<\/span><\/p><\/td>

In claims on individual loans, from small amounts<\/span><\/p><\/td><\/tr>

What you can see<\/span><\/p><\/td>

Periodic fund reports<\/span><\/p><\/td>

Each loan you hold, its originator and its terms<\/span><\/p><\/td><\/tr>

Who chooses the loans<\/span><\/p><\/td>

The fund manager<\/span><\/p><\/td>

You, or Auto Invest based on your settings<\/span><\/p><\/td><\/tr><\/tbody><\/table>

The mechanics of how risk is shared are also familiar. Institutional lenders often require the originating lender to keep a stake in the loans it sells, so that both sides lose if the loans perform badly. On Income Marketplace, this is the Junior Share: the part of each loan the Loan Originator keeps, which ranks behind investors’ claims. We will look at this and our other protections in detail later in this series.<\/span><\/p>

What this means for you<\/b><\/h2>

Seeing P2P lending as part of private credit helps explain how your investment behaves.<\/span><\/p>