Welcome back to our market overview series. Today, we journey to the vibrant land of flamenco and fiestas, paella and Picasso, and some of the most dynamic and evolving economic sectors globally: Spain.
A country where old meets new, tradition dances with innovation, and the economy basks in the sun of digital transformation and the fintech boom.
Spain's economic landscape: A bullish perspective
Spain, with its mix of beautiful beaches, ancient history, and lively culture, is more than just a popular holiday destination. It’s the fourth-largest economy in the Eurozone and the 13th globally, boasting a strong domestic market and a thriving export sector.1
The Spanish economy has shown resilience in the face of the 2008 global financial crisis and the more recent COVID-19 pandemic. Although it experienced significant contractions, Spain emerged from both crises with a stronger, more innovative, and digitally adept economy.
Spain’s GDP contracted by -11% in 2020 due to the pandemic, but a strong rebound of 5.5% in 2021-2022 points to its resilient nature.2,3 The nation’s economy boasts diverse sectors, with services leading the charge, accounting for approximately 67% of GDP, followed by industry (20%) and agriculture (2.6%).4
Spain is also known for its large automotive industry and is the second-largest car manufacturer in Europe, producing over 2 million vehicles in 2022.5 The fashion retail industry is also a notable contributor to Spain’s economy. Inditex, the parent company of Zara, recorded sales of €32.6 billion in 2022, and Mango, another iconic Spanish brand, reported a turnover of approximately €2.6 billion in the same year.6,7
Spain's banking sector: Navigating the fintech surge
Spain, traditionally anchored by its powerful banking sector in the Eurozone, is now gaining momentum as a linchpin in the European fintech domain. Ranking 7th in Europe and 21st worldwide, the nation’s financial sector has wholeheartedly embraced the transformative potential of fintech. This prominence has not only elevated Spain’s reputation but also ignited an investment fervor. Capturing a significant 46% slice of global fintech investment, the nation’s appeal as an investment hub is undeniable. The bustling cities of Madrid, Barcelona, and Valencia emerge as fintech hotspots, hosting over 80% of these startups.8
Furthermore, digital financial adoption in Spain has outpaced many of its European neighbors. By the close of 2022, approximately 69% of Spaniards between the ages of 15-79 had engaged with e-banking and e-commerce services. This high adoption rate isn’t limited to banking but extends across the fintech spectrum, from digital wallets and payments to insurance technology.9
This rapid adoption is not merely a reflection of technological convenience but a shift in consumer behavior and trust. The Spanish populace is not only becoming more tech-savvy, but is also increasingly placing trust in digital platforms for their financial needs.
Given these dynamics, Spain’s fintech landscape is not just growing but evolving, positioning itself as a critical player in the European fintech arena. The coming years are poised to witness further integration, innovation, and perhaps even dominance of Spanish fintech within Europe.
A new era: Alternative lending in Spain
The data pertaining to Spain’s alternative lending market paints an enlightening picture of the evolving financial landscape in the country. The total volume of alternative lending is valued well over €600 million. This steady, annual progression is indicative of a larger shift in Spain’s financial behavior, signifying a greater trust and reliance on non-traditional lending avenues. 10
In the first half of 2023, ID Finance Spain, an emerging fintech in alternative lending, posted revenue of €59 million. Their growth metrics are indicative of the broader shift in Spain’s financial landscape, as more Spaniards lean towards non-traditional lending avenues.
Factors fueling this trend include the perceivably rigid structures of traditional banks and the allure of fintech solutions. Platforms like ID Finance Spain’s MoneyMan and the award-winning financial wellness app, Plazo, are case points. Their rapid approvals and tailored solutions are appealing to an increasingly tech-savvy populace. Forecasts suggest that by 2024, the average funding per loan in the crowdlending sector (business loans) will soar to €70 000. This surge might be attributed to Spain’s blossoming entrepreneurial spirit.11
Tapping into Spain’s alternative lending boom
In a world where traditional banking systems often fall short in meeting the varied needs of consumers, alternative lending presents a new frontier. Spain, with its evolving economy and adaptive consumers, has quickly recognized the potential of this non-traditional financial ecosystem. ID Finance Spain is a testament to the thriving alternative lending market in the country.
Founded in 2012, ID Finance Spain is headquartered in Barcelona and has continued to show resilience and growth in this expanding sector. The company reported a net portfolio increase of 8% to €51 million and originated €121.1 million in consumer loans in the first half of 2023 alone. On average, they process over 70,000 applications per month, highlighting the strong demand for alternative lending solutions in Spain.
Investing in Notes for ID Finance Spain provides an avenue to contribute to and benefit from Spain’s growing alternative lending landscape.
If you’re interested in exploring investment opportunities within this burgeoning market, consider ID Finance Spain, Spain’s leading lending company on Mintos.
Or, discover our lending companies that best aligns with your investment goals.
1 Labour market information: Spain. (n.d.). EURES. https://eures.ec.europa.eu/living-and-working/labour-market-information/labour-market-information-spain_en (Accessed August 2023)
2 Pinilla, J., Barber, P., Vallejo-Torres, L., Rodríguez-Mireles, S., López-Valcárcel, B. G., & Serra-Majem, L. (2021, April 28). The Economic Impact of the SARS-COV-2 (COVID-19) Pandemic in Spain. PubMed Central (PMC). https://doi.org/10.3390/ijerph18094708 (Accessed August 2023)
3 Economic forecast for Spain. (n.d.). Retrieved from https://economy-finance.ec.europa.eu/economic-surveillance-eu-economies/spain/economic-forecast-spain_en (Accessed August 2023)
4 Spain – Distribution of gross domestic product (GDP) across economic sectors 2021 | Statista. (n.d.). Statista. https://www.statista.com/statistics/271079/distribution-of-gross-domestic-product-gdp-across-economic-sectors-in-spain/ (Accessed August 2023)
5 2022 statistics | www.oica.net. (n.d.). 2022 Statistics | www.oica.net. https://www.oica.net/category/production-statistics/2022-statistics/ (Accessed August 2023)
6 Loeb, W. (2023, March 22). Zara’s 30% Expansion And 2022 Outstanding Results. Forbes. https://www.forbes.com/sites/walterloeb/2023/03/22/zaras-30-expansion-and-2022-outstanding-results/ (Accessed August 2023)
7 Mango makes a profit of 81 million euros and achieves record sales in 2022. (2023, August 4). Mango Fashion Group. https://www.mangofashiongroup.com/en/en/w/mango-gana-81-millones-de-euros-en-2022-y-alcanza-su-r%C3%A9cord-hist%C3%B3rico-de-ventas (Accessed August 2023)
8 ¿Cuál es la realidad del Fintech en España? (n.d.). ¿Cuál Es La Realidad Del Fintech En España? https://www.ey.com/es_es/financial-services/cual-es-la-realidad-del-fintech-en-espana (Accessed August 2023)
9 Eurostat (n.d) https://ec.europa.eu/eurostat/databrowser/view/ISOC_BDE15CBC/default/table?lang=en. (n.d.). https://ec.europa.eu/eurostat/databrowser/view/ISOC_BDE15CBC/default/table?lang=en (Accessed August 2023)
10 Alternative finance market size in Spain 2020 | Statista. (n.d.). Statista. https://www.statista.com/statistics/1115337/europe-market-size-alternative-finance-spain/ (Accessed August 2023)
11 Alternative Lending funding per loan in Spain 2024 | Statista. (n.d.). Statista. https://www.statista.com/forecasts/773315/digital-market-outlook-alternative-lending-arpu-by-segment-in-spain (Accessed August 2023)