June 2021: Private Debt and Digital Lending Digest
by Jaslyn Tan
Welcome to the monthly digest about Private Debt and investing in Digital Lending providers. We have hand-picked thought pieces and new information relevant to the topic from the past month. Please, feel free to reach out in case of questions or feedback.
Critics raised alarms about the bubble they saw growing in private lending long before the pandemic — but the sector emerged from the crisis in a healthy position.
In the face of low rates, yield-oriented alternative investments may be a viable solution for fixed income investors.
Regional investors look set to seek more investments in the asset class, especially from North America and Asia, say senior executives at asset owners and fund houses.
DBS announced on Thursday (June 17) that it will be the anchor investor in a special situations opportunities private debt fund by Muzinich Asia Pacific.
Since the Global Financial Crisis (GFC), private debt has received increased attention and growth for a variety of reasons. These have included the ongoing low interest rate environment, elevated equity valuations, the diversification benefits and higher yield potential offered by private debt. The case for private debt appears to be a strong for investors with long-term investment horizons and higher risk tolerances.
The private capital industry has grown to more than $7tn thanks to demand for higher-returning but pricey and opaque strategies, spurring the likes of Schroders and JPMorgan to launch new divisions and sending others on the prowl for acquisitions.
Private credit managers expect more demand from investors following the pandemic, with many under-allocated to the asset class.
More and more people, from all age groups are turning to instant loan apps these days for their urgent requirement to fund personal expenses. Digital lending is a reality that’s transforming the credit scene in India at a rapid pace.
Bank of England governor Andrew Bailey has said regulation of cryptocurrencies is needed and predicted that digital money could lead to a rise in non-bank lending.
Indonesia’s BRI Agro seeks to raise external capital and enter supply chain financing to advance its digital banking ambitions in the country.
Navigating through the post-pandemic world will only get a little harder before it gets easier, but that is no reason to put off entrepreneurial dreams. Instead, it is all the more reason to push harder to keep those dreams alive, by taking initiative and exploring alternative lending options through a qualified business loan broker.
A new study from Juniper Research has found that spending via buy now pay later services, which are integrated within eCommerce checkout options, including fixed instalment plans and flexible credit accounts, will reach $995 billion in 2026, from $266 billion in 2021. This 274% growth will be fuelled by a greater appetite from users for credit to spread costs, particularly in the wake of the pandemic, which has put extreme pressure on user finances.
Thanks to fintech, new generations of consumers are taking advantage of the flexibility, affordability and convenience of interest-free payment, and merchants are reaping financial and operational benefits.