The rise or fall of private credit in Thailand

Is private credit really in a bubble, or is it Thailand’s next big opportunity? By Rewin Pataibunlue

- Rewin Pataibunlue

Private credit has rapidly expanded into a US$2.3-trillion global industry, raising questions about whether this growth represents genuine financial strength or early signs of a bubble. At the same time, interest in private credit in Thailand has increased significantly as companies search for new ways to access capital while traditional funding channels become increasingly restrictive.

Although it may appear relatively new to some market participants, private credit has been part of global financing for decades. At its core, private credit refers to lending provided by investment funds rather than banks. These lenders negotiate flexible structures, stronger protections and closer monitoring of borrowers compared with traditional bank loans or public bonds.

The asset class accelerated after the 2008 global financial crisis, when new regulations forced banks to reduce certain types of lending, especially to mid-market companies. During the Covid-19 pandemic, companies urgently needed liquidity while banks again became more cautious.

In both periods, private credit stepped in to fill the funding gap and gradually became a major component of the global financial system.

Today, with private-credit assets reaching $2.3 trillion, investors naturally ask: Is the market overheating?

Concerns intensified after the failures of two companies — Tricolor and First Brands — in the US. Jamie Dimon, the chief executive of JPMorgan, remarked: “Ifyou see one cockroach, there are usually more.’ This sparked fears of broader issues. However, deeper analysis shows these failures were company-specific problems, not systemic weaknesses in the private credit model:

= First Brands Group, an auto parts maker, held $9-10 billion in debt, mostly tied to syndicated loans, not private credit facilities.