Ajay Srinivasan News: How Private Credit is Filling the Funding Gap in India
.
In recent times, India has seen an interesting shift in the way businesses raise money. Banks, which have been considered the most preferred source for funding, have witnessed a decline. Like we have witnessed in the US in a big way, there is the emergence of a new funding channel- Private Credit. A recent blog by Ajay Srinivasan, who is a veteran of the financial services industry, highlights some interesting points. As per Ajay Srinivasan news, private credit is increasingly becoming a powerful tool to meet the funding requirements of borrowers who don’t get loans from banks due to the various limitations on banks. This new asset class presents opportunities for both investors and businesses.
We will refer to the thoughts of Ajay Srinivasan and others on private credit and how it is shaping India’s financial landscape.
All About Private Credit
Private credit refers to non-bank lending, mostly provided by non-bank lending companies, asset managers, private debt funds or special situation investors. Private credit offers capital directly to companies, often for a fixed return, and operates outside the traditional regulatory framework that applies to banks.
In the world, there has been a rise in the popularity of private credit for being an alternative source of capital. Of the approximately $ 2 trillion market size, the US accounts for over half, followed by Europe. Asia Pacific, traditionally a bank led market, is now a fast-growing private credit market. In India, too, private credit funding has emerged as a convenient source of funds, especially for the firms that are unable to secure support from banks. Many industry observers check Ajay Srinivasan news to get his insights on this trend, given his long history with the mutual fund industry in India
Why India Needs Private Credit
Banking Sector Limitations: The Indian banks are often cautious in lending, have a bit of a templated approach to lending and often take time to process non-standard requests. Furthermore, regulations make it difficult for them to finance land acquisitions or lend against shares.
Rising Capital Needs: Businesses in India are growing and require funds to grow and expand, and often need money for meeting needs that are not met by traditional financiers, be it acquisition of land, acquisition of a company, increasing stake in a company, buying out a partner or lending in an Opco vs security from say a Holdco. Thus, they consider private credit as a very feasible option.
Credit Gaps for Mid-Sized Companies: Many small and mid-sized businesses don’t have access to bond markets, or don’t have a long enough track record or have structures that are not amenable to a standard bond issuance, which makes private credit an ideal option.
SlowBank Approvals: Traditional banks have processes that make it difficult for businesses to get approvals for non-standard requests quickly. On the other hand, private credit providers often have faster approvals.
So, as per Ajay Srinivasan News, “This segment is seeing growing traction on the demand side. The drivers of demand growth are the growth of the space banks and NBFCs can’t or are not keen to finance, underdeveloped bond markets, the ability of these providers to create customised solutions for borrowers, growth of private equity led transactions and increasing investor appetite for higher yielding fixed income instruments, especially after the change in taxation on fixed income funds. As a result, we have seen an increase in activity on the supply side too, with more AIFs coming into existence. “
Advantages of Private Credit
- Flexibility- Private credit deals are more flexible and offer tailored financing solutions to all sizes of businesses and investors.
- Diversification- Private credit offers an attractive risk-adjusted return profile to investors who look beyond the traditional asset classes.
- High Yields- Unlike conventional fixed-income securities, where yields are low, private credit provides higher yields.
Ajay Srinivasan Thoughts About Private Credit’s Future in India
According to industry leader Ajay Srinivasan, with rapid economic development in India, the demand for credit will have to be met by several providers in the coming years, and thus, the opportunity for private credit funds will be attractive. Besides, the growth of the private credit market can potentially unlock value for both investors and the economy as a whole, fostering innovation and job creation.
With India on its way to becoming a $5 trillion economy, the requirement for capital across industries will increase in the coming years. Private credit will not replace banks or capital markets, but it will complement them.
Conclusion
Today, private credit is no longer a niche concept in India; rather has become a mainstream financing tool. By bridging the gaps left by traditional lenders, it is helping businesses unlock growth, drive innovation, and support the country’s economic ambitions.
Disclaimer: No Business Standard Journalist was involved in creation of this content
Topics : Ajay Srinivasan News
Don't miss the most important news and views of the day. Get them on our Telegram channel
First Published: Sep 05 2025 | 11:35 AM IST
