Private Capital
Cut risk weight to help SMEs, banks tell RBI
11 Dec 2023
Even though banks' dealing with SMEs have somewhat changed over the years, many small entrepreneurs resort to private credit as most banks and large non-banking finance companies have limited exposure to them. In the void created over the past few years with NBFCs shrinking their books, alternative investment funds (AIFs) are slowly emerging as providers of debt capital to some of the smaller and unrated businesses.

According to a recent report by Praxis Global Alliance and Indian Venture & Alternate Capital Association, Indian private credit investments have grown rapidly - deploying $5.1 billion in H12023 with average deal size of $80 million, up from $2.4 billion in 2018 when the average deal size was $16 million.

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