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Private credit has grown into a $2.3 trillion global industry, filling financing gaps left by stricter bank lending post-2008 and during COVID-19. It involves lending by investment funds, offering flexible structures, strong protections, and active monitoring, which differentiates it from traditional bank loans.
Recent failures of US companies like Tricolor and First Brands are company-specific and do not indicate systemic issues in private credit, which remains disciplined and risk-conscious. The sector’s rapid growth—around 15% annually since 2014—reflects a structural shift in corporate financing, with attractive returns of 8-12% and low default rates (~2%).
While concerns about overheating persist in the US and Europe, Thailand is still early in its private credit journey, mainly driven by the tightening of traditional funding sources such as banking and bonds. Thai private credit mainly involves senior, asset-backed structures using real collateral, offering clear repayment and protection.
Risks exist but can be managed through disciplined structuring, legal safeguards, and active oversight. With proper risk management, private credit has the potential to become a vital, resilient financing option for Thai companies, supporting sustainable growth.