New World Invesment Research

EM corporate financing continues to be dominated by domestic bank lending, though its share has steadily declined over the past decade. In parallel, private credit has expanded from a negligible base to a small but increasingly visible segment of the capital structure. The surge in post-2021 fundraising indicates growing investor appetite and borrower acceptance, pointing to early-stage structural diversification rather than cyclical fluctuation.

Although emerging markets carry higher risk and often exhibit blurred boundaries between private and public credit, sovereign wealth funds and global investors are increasingly allocating capital to EM private credit, particularly in Latin America and Asia.

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