Emerging-market private credit hits record USD 18 bn this year

Lending by private credit firms in emerging markets has surged to USD 18 bn in 9M 2025, already surpassing the previous full-year record of USD 16 bn in 2022, according to a report (pdf) by the Global Private Capital Association. The boom comes amid a pullback in bank lending across Africa, Latin America, and other regions, amid a higher interest rate environment — especially in countries like Brazil and Turkey — and stricter capital requirements.

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Emerging-market private credit agreements are also emerging as attractive alternatives to the US market, as private credit transactions tend to be more tightly structured with stronger creditor protections. Average leverage sits at roughly 3x debt-to-earnings vs 4-5x for US transactions, and yields can reach 17%, compared with roughly 10% in the US. Managers such as Ninety One highlight that loans often represent just 30-40% of underlying asset values — a level of discipline they say has eroded in developed markets.

Bigger agreements, fewer transactions: The USD 18 bn deployed this year was spread across just 221 transactions, compared with USD 14 bn across 408 agreements last year, indicating private credit funds are underwriting larger transactions. The biggest so far is a USD 3.4 bn loan to India’s Shapoorji Pallonji, priced at an almost 20% yield, and another major transaction is the USD 1.4 bn in financing for Saudi fintech Tamara, led by Apollo and other investors.

The bulk of the funds went to Asia, with GCPA logging USD 9.6 bn in disclosed private credit transaction value across the region so far this year.

There’s a big opening for private credit in the Middle East: Head of Emerging Market Private Investments at Janus Henderson Yaser Moustafa cited the need for more funding amid positive economic momentum in the region, especially in countries like Saudi Arabia, where bank balance sheets remain stretched, leaving a gap for private credit financing.

MARKETS THIS MORNING-

Asian markets are mostly in the green this morning, tracking Wall Street gains following the Fed’s interest rate cut yesterday. Japan’s Nikkei is leading gains, with the index up nearly 1%, while Hong Kong’s Hang Seng is up 0.7%, China’s CSI 300 is up 0.2%, and South Korea’s Kospi gained 0.3%. Over on Wall Street, futures paint a mixed picture — with the S&P 500 hovering below the flatline and Nasdaq down marginally.

THE CLOSING BELL-

The ADX rose 0.3% yesterday on turnover of AED 875.1 mn. The index is up 6.2% YTD.

In the green: Ins. House (+14.1%), Finance House (+10.6%) and Hayah Ins. Company (+7.2%).

In the red: Aram Group (-9.1%), Hily Holding (-8.7%) and Alef Education Holding (-2.7%).

Over on the DFM, the index rose 0.4% on turnover of AED 660.5 mn. Meanwhile, Nasdaq Dubai was up 0.6%.