Private credit flows accelerate in Latin America and Asia

By Vriti Gothi

The Global Private Capital Association (GPCA) has released a comprehensive analysis of private credit activity outside the United States, indicating a continued shift in investor focus toward emerging and growth markets. The new publication, Private Credit Outlook: Assessing Opportunities Beyond the US, shows that private credit deployments in GPCA markets reached $18 billion in disclosed value through the first three quarters of 2025. That figure already exceeds previous annual totals on record, signalling a marked rise in the use of non-bank lending channels across Asia, Latin America, Africa, Central and Eastern Europe, and the Middle East.

The report is anchored in a newly compiled dataset capturing transaction-level information from 153 deals executed since 2021. GPCA positions this dataset as the first of its kind, offering a transparent view into deal structures, pricing dynamics and borrower profiles in regions where market-level information is typically fragmented. The analysis comes at a time when conventional lenders in several economies have pulled back, resulting in a funding gap for mid-sized corporates and sector-specific borrowers. Against this backdrop, private credit has been gaining traction as businesses seek long-term capital with greater certainty of execution.

A central theme emerging from the report is the comparative strength of deal fundamentals outside the US. GPCA highlights that transactions in its focus markets generally display lower leverage, stronger interest coverage ratios, and shorter maturities. These conditions translate into higher gross yields for investors, reflecting both elevated risk premiums and more conservative underwriting practices. The outlook contrasts sharply with the structure of US broadly syndicated loans, in which covenant-lite structures account for close to 90% of issuance. By comparison, only 2% of GPCA market transactions featured covenant-lite terms, suggesting the relative preservation of lender safeguards.

Deal concentration is also shaping the development of the asset class. Since 2021, Latin America has absorbed 45% of total deployed private credit capital, followed by Asia at 38%. The patterns reflect several drivers, including large domestic borrower bases, regulatory shifts encouraging diversified capital sources, and the expansion of global funds into secondary hubs such as Southeast Asia, India and Brazil. GPCA notes that although Africa, Central and Eastern Europe, and the Middle East remain smaller in volume terms, capital formation and deployment in these regions are accelerating.