🛡️Private Credit

The private credit market is a vast ecosystem composed of various loan products catering to the financing needs of consumers and small to medium-sized enterprises. Unlike the highly regulated public credit market, which primarily serves governments and large corporations, the private credit market is more fragmented and lacks uniform organization.

Private credit typically includes two categories:

• Debt securities not listed on exchanges or freely traded in public markets, such as private asset-backed securities and bonds in private markets.

• Loan products issued by banks or non-bank institutions, such as structured credit, alternative/fintech loans, and commercial loans.

These different types of private credit products form a complex ecosystem that supports various types of borrowers. In this ecosystem, both banks and non-bank institutions play crucial roles. Banks usually rely on deposits and public market financing, while non-bank institutions may obtain funds from other institutions or private investors.

Ultimately, these funds are used to provide loans to individual consumers and businesses. Each participant in this ecosystem assumes varying degrees of risk and expects returns from these transactions.