Exploring the Swedish Credit Market Ecosystem : A study of loan intermediaries’ contribution to a more efficient consumer credit market

Abstract: A long period of low interest rates, economic growth and a booming housing market hasresulted in an increase in the debt level of Swedish households. New digital ways of providingfinancial services are changing the traditional banking world and are often praised for beingefficient and inclusive. Financial intermediaries, a party between a buyer and a seller that actsas a mediator to efficiently facilitate transactions, play an important role in the economy andsociety. Approximately 40-55 percent of unsecured consumer loans were taken through a loanintermediary in Sweden during 2020. As a result of the situation of the Swedish credit market,there is a need to understand how the actors in the market are connected and how they createvalue together. Loan intermediaries are an important and interesting actor to analyze furthersince such a large share of unsecured consumer loans are taken through their service, andbecause this kind of service is growing to be an increasing part of the credit ecosystem.According to business ecosystem theory, all actors are viewed within a closed system. In theideal scenario, participants would cooperate to foster stability and systematic benefits andimbalances in the ecosystem have harmful impact on all members. This master thesis aims atdeveloping an ecosystem of the Swedish credit market and to describe loan intermediaries'contribution to a more efficient consumer credit market.First, this study resulted in the development of a methodology to identify, describe, andvisualize ecosystems. A five-step process was identified and implemented to create anunderstandable image of the credit market ecosystem. The method resulted in an ecosystemmap, visualizing 26 generic actors and their interconnections. Second, to gain a deeperunderstanding of how loan intermediaries contribute to an efficient system, semi-structuredinterviews were held with representatives from loan intermediary companies and the SwedishEnforcement Authority. According to this study, loan intermediaries contribute to a moreefficient consumer credit market by providing access to credit, by making information moretransparent and readily available for consumers, and by driving innovation.