Private credit investment into emerging markets rose to a record $22.3bn last year, almost 40% above the previous peak in 2022, as investors sought alternative sources of yield amid tighter bank lending and increased volatility in developed markets, according to a report by Reuters citing data from the Global Private Capital Association.
The data also showed total private capital investment across emerging markets increased 33% year on year to $150.3bn, with India and the Middle East recording the fastest growth.
Private credit accounted for 14% of the private capital investments in emerging markets, while venture capital’s share fell for a fourth consecutive year to 24%.
Infrastructure remained a key focus, representing nearly a quarter of total private capital deployment, with India alone accounting for $8.8bn of infrastructure investment. GPCA said private credit growth was being driven by businesses underserved by traditional banks, with rising activity across sectors such as energy and digital infrastructure.
Emerging markets still represent less than 10% of the global private credit market. Deal volumes fell by around 10%, reflecting a shift toward larger transactions and weaker venture capital activity in China and Southeast Asia, while private capital investment in China declined for a fourth straight year amid a growing reliance on domestic funding sources.
