Consumer lending unlocked: Opportunities and risks in a US$27 trillion market

CONSUMER lending has become one of the most dynamic segments in private markets, evolving rapidly alongside advancements in technology and shifts in consumer behaviour. With a market size of US$27 trillion and growing, consumer lending offers investors a diverse array of opportunities, from traditional mortgage-backed securities to emerging products like buy now, pay later (BNPL) loans.

As the sector evolves, it brings unique challenges for investors and policymakers, from navigating new risk-return profiles to addressing gaps in regulation and transparency. Understanding this evolving landscape is key to unlocking its full potential.

In a recent Bloomberg interview, Apollo global head of credit product Akila Grewal forecast exponential growth in private credit to US$40 trillion. The most interesting tidbit in that interview was the inclusion of consumer loans in the mix. It is the fastest-growing sub-asset class in private markets, and can complement a portfolio’s exposure to direct lending.