Private credit to emerge as key growth engine for India’s economy: Industry leaders

Mumbai, July 9 (SocialNews.XYZ) India's private credit market is set for sustained expansion over the coming years, driven by growing awareness, regulatory support, digital innovation and rising demand for alternative financing, industry leaders said on Thursday.

Speaking to IANS on the sidelines of IVCA Private Credit Summit 2026 here, they said private credit is emerging as a mainstream asset class that complements traditional bank lending, particularly for startups, MSMEs and mid-market businesses seeking flexible funding solutions.

Monu Jain, Partner at Aavishkaar Capital and Co-Chair of the Private Credit Council at IVCA, said one of the summit's primary objectives is to increase awareness about private credit, which remains a relatively small segment despite its strong growth trajectory.

"The summit brings together funds, investors and other ecosystem participants to understand the different forms of private credit, who it serves, how borrowers can prepare for it and the various facilitators that support the ecosystem," she said.

IVCA President Rajat Tandon said private credit has become an important financing option as startups and growth-stage companies increasingly seek debt financing instead of diluting equity.

He explained that while banks traditionally rely on collateral-based lending, venture debt and private credit provide flexible funding alternatives for businesses at different stages of growth.

"Right up to, you know, where investments you saw in real estate, nearly about 40 per cent of the investments today in the country are through private credit. Coming to my very next question, as we know that RBI has a tweak to certain norms in terms of private lending," he told IANS.

Discussing digitalisation, he said improved access to information through digital platforms is making financing more efficient, especially for MSMEs. However, he emphasised that stronger cybersecurity measures, data protection and responsible use of digital information will remain critical as the ecosystem evolves.

Karthik Athreya, Managing Director at Sundaram Alternates, described private credit as an emerging asset class that is gradually becoming part of mainstream investment portfolios.

"I think private credit is more of an emerging asset class, which is slowly becoming part of mainstream investment for investors, particularly in the country," Athreya told IANS.

Unlike conventional fixed-income products such as bank fixed deposits or debt mutual funds, he said private credit has the potential to generate double-digit returns.

Source: IANS