India’s private credit market is expected to expand steadily in the upcoming years, driven by factors like increasing awareness, regulatory backing, digital advancements, and a growing need for alternative financing, industry experts revealed. At the IVCA Private Credit Summit 2026 in Mumbai, it was highlighted that private credit is evolving into a mainstream asset class that complements traditional bank loans, especially catering to startups, MSMEs, and mid-market enterprises requiring flexible funding options.
Monu Jain, Partner at Aavishkaar Capital and Co-Chair of the Private Credit Council at IVCA, emphasized the summit’s focus on enhancing understanding about private credit, which despite its robust growth, remains a relatively niche segment. Jain stated that the event brings together funds, investors, and ecosystem players to delve into the various forms of private credit, its target audience, borrower readiness, and the supportive mechanisms within the ecosystem.
Rajat Tandon, President of IVCA, highlighted the significance of private credit as a financing avenue, particularly for startups and growing companies opting for debt financing over equity dilution. He pointed out that while traditional bank lending leans on collateral, venture debt and private credit offer adaptable funding choices for businesses at different developmental stages. Tandon also touched upon the increasing role of private credit in the country’s investment landscape, with about 40% of current investments being channeled through this route.
Discussing the impact of digitalization, Tandon stressed that the enhanced accessibility to information via digital platforms is streamlining financing processes, especially benefiting MSMEs. However, he underscored the importance of robust cybersecurity measures, data protection, and responsible digital information usage as critical elements in the evolving financial ecosystem.
Karthik Athreya, Managing Director at Sundaram Alternates, characterized private credit as an emerging asset class gradually integrating into mainstream investment portfolios. Athreya noted that private credit, unlike conventional fixed-income options such as bank deposits or debt funds, holds the potential to yield double-digit returns, making it an attractive choice for investors seeking diversified investment avenues.
