Asia’s SMEs, education, and tech sectors targeted by private credit.

TLDR: Asian private credit players, including BlackRock, HSBC, and Bank of Singapore, are rushing to bridge the funding gap for small and medium-sized enterprises (SMEs) and sectors like education and technology. Asia accounts for a significant portion of global GDP, economic growth, and population, yet only receives about 5.5% of the $1.5 trillion allocated to private credit markets globally. Factors such as high interest rates and the changing economic landscape after the Covid-19 pandemic are pushing companies to private lenders for bridge financing. SMEs have a slimmer chance of obtaining bank loans compared to larger firms, creating a financing gap of around $2.4 trillion every year in East Asia and the Pacific. Private credit providers like ADM Capital are targeting this segment by running a secured, direct lending credit strategy. The education sector in Asia, which requires heavy capital for development, is also an area of focus for private credit. Additionally, the technology sector is catching the attention of private credit players as public markets become hesitant about the industry amid high demand for capital.