Private Credit expands its appeal in Asia’s financing shift

As banks retrench, private lenders are stepping in to fund Asia’s growth. Investors say the shift marks a structural change in regional financing—not just another cycle.

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Private credit’s rapid rise across Asia is being seen less as a passing trend and more as a secular transformation in how companies access capital. That was the consensus amongst speakers and guests at the recent IDEAs: Alternatives in Focus – Financing Beyond Banks in India & Southeast Asia event, hosted by Lighthouse Canton in Singapore on the sidelines of SuperReturn Asia 2025.

“Asia itself is not a homogeneous market,” said Zongwen Tan , Member of Management, Private Credit Asia at Partners Group. “It tends to be sub-region by sub-region.” He added, “There is room for acceleration, but it’s very nuanced.”

Tan pointed to corporate M&A and PE-sponsored financings as a case in point. “Corporate M&A and PE-sponsored activity has been on the rise, and that naturally creates a need for a different sort of capital,” he said. “A sponsor wishing to take private a company may require responsiveness and flexibility from alternative sources of capital such as private credit funds.”

That speed and flexibility, panellists noted, are helping private credit fill gaps left by risk-averse lenders. The asset class has grown swiftly in the region where Asia-Pacific-focused private debt AUM was USD99.3 billion as of the end of 2023 (according to Preqin data cited in an October 2024 report). This figure grew from $58.2 billion in 2020, representing a growth of over 70% in that three-year period.

Growth is strongest in India, Japan and Southeast Asia—markets where banks’ appetite for mid-market and structured lending remains limited.

When asked whether this wave represents a “secular” shift or just “this time it’s different.” Tan was firm: “It’s driven by strong fundamentals.”

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