Private credit a strategic partner does not rival for Singapore banks

It’s allowing banks to optimise their balance sheets.

Private credit is a strategic partner and not a competitor for banks, said KPMG.

Singapore’s market is evolving through “coordinated specialisation” between banks and private credit, KPMG said in its "Private credit in Singapore” report published in July 2026.

Banks optimise the balance sheet capacity and distribution, whilst private credit providers are increasingly taking on more complex underwriting and risk.

“Private credit is no longer peripheral in Singapore. It has become a structural feature of the financing ecosystem working alongside banks, shaped by regulations, and increasingly institutional in form,” KPMG said.

Singapore in particular is becoming Asia’s risk management hub for private credit, said KPMG partner Adrian Chan. It’s “the place where origination, underwriting, documentation, monitoring and workouts are designed to operate across borders,” said Chan.

In contrast, the Hong Kong Monetary Authority (HKMA) expressed concerns about the rapid growth of private credit and its potential systemic implications, according to a separate report by KPMG that called for banks to review their existing risk infrastructure as private credit take-up ramps up in the city.

Earlier estimates by Moody’s said that private credit assets under management (AUM) are set to cross $4t by 2030, with it gaining traction in the APAC and EMEA regions.

APAC is poised for expansion, supported by a low starting base, rising domestic financing requirements, and investors’ search for yield and diversification, Moody’s had said.

Asia-Pacific’s private credit market is projected to grow from US$59b ($75.021b) in 2024 to US$92b ($116.98b) by 2027.