Private credit can sound like something reserved for big companies and wealthy investors. But if you’re looking for a personal loan, funding a business or exploring investment returns, understanding the different types of lending can help you ask better questions.
The first distinction matters: a personal loan from a private lender is not necessarily the same as institutional private credit. Both involve borrowing, but their customers, contracts and investment structures can be very different.
This guide explains the subject from three angles: a person borrowing money, a business seeking finance and an investor putting money into credit funds.
Table of Contents
1. What Exactly Is Private Credit?
In investment markets, private credit usually means debt negotiated directly between businesses and non-bank lenders, outside publicly traded debt markets.
A specialist fund might lend to a company, finance a project or provide another privately negotiated debt investment. The borrower agrees to pay interest and repay the money under specified conditions.
The IMF distinguishes this market from conventional bank loans, broadly syndicated loans and publicly traded corporate bonds.
However, people also use “private lending” more broadly. That is why it helps to separate these situations:
| Situation | What it means |
| Personal borrowing | An individual takes a loan from a lender, potentially a non-bank provider. |
| Business borrowing | A business obtains finance from a bank, specialist lender or private credit provider. |
| Private credit investing | An investor supplies capital to a fund or arrangement that finances borrowers. |
2. Can a Person Borrow From a Private Lender?
Yes. A South African individual can apply for a personal loan from a non-bank lender. Approval depends on the provider’s requirements and the applicable lending rules, rather than citizenship alone.
This is generally described as personal lending or consumer credit. It should not automatically be presented as the same product as a private credit investment fund.
Why might someone choose a personal loan?
People may need finance for a planned expense, an emergency or debt consolidation. Whether the loan helps depends on its total cost and whether repayments fit the household budget.
For example, combining several debts into one loan may simplify payments. But a lower monthly instalment could result from a longer repayment period—and increase the total amount paid.
What are the advantages of private personal loans?
- Access to funds: Can help cover a planned expense or unexpected cost.
- Predictable repayments: Fixed-rate loans can make monthly budgeting easier.
- No collateral in some cases: Unsecured loans do not require an asset as security.
- Debt consolidation: May simplify repayments and reduce costs if the new loan offers better terms.
What are the disadvantages of private personal loans?
Before accepting, check:
- Total repayment: Include interest and all applicable charges.
- Repayment period: A longer term can make instalments smaller while increasing total cost.
- Security: Understand whether an asset is at risk if you cannot repay.
- Missed-payment consequences: Read the default provisions.
- Early settlement terms: Ask how settling sooner affects the amount payable.
- Lender identity: Confirm who is providing the loan and which regulatory requirements apply.
Do not assume that “private” means cheaper, easier or less formal. A personal loan is still a financial obligation.
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3. Can a Business Get a Private Credit Loan?
Yes, a business may qualify for financing from a private credit provider. But not every business loan is private credit: banks also provide business loans, and different non-bank lenders serve different markets.
A business might seek funding for equipment, working capital, expansion, an acquisition or a project.
Institutional private credit providers usually assess the business and its ability to repay. Depending on the proposal, they may examine:
- Financial statements and cash flow.
- Existing borrowing.
- The purpose of the funding.
- Assets or other security.
- Management experience.
- The proposed repayment timetable.
These are common assessment areas, not a universal application checklist.
Why do businesses use private credit?
A company may want financing tailored to its circumstances or need a lender with specialist knowledge.
The IMF identifies customised terms and close lender relationships as potential advantages, while noting that private credit is often more expensive than bank borrowing.
What are the advantages of business loans?
- Funding for growth: Can support equipment purchases, expansion or new projects.
- Working capital: Helps cover operating expenses while awaiting customer payments.
- Retain ownership: A standard loan generally avoids selling shares in your business.
- Tailored financing: Some private lenders can structure repayments around the business’s cash flow.
What are the disadvantages?
Business borrowers should consider interest, fees, security, guarantees and contractual restrictions.
A loan may require regular reporting or restrict further borrowing. A large final repayment can also create refinancing pressure.
For a business owner, a personal guarantee deserves particular attention: depending on its terms, it can create exposure beyond the company itself.
4. How Can Investors Use Private Credit?
Instead of borrowing, an investor can provide capital to a fund that finances borrowers.
The investor’s return depends on the fund’s assets, expenses and performance. Borrowers’ interest payments may support distributions, but payments are not guaranteed.
In South Africa, private credit can include financing connected to infrastructure. Ninety One describes its infrastructure credit strategy as providing debt to projects and companies, with returns primarily earned through borrower interest payments. This is an example, not a recommendation.
Can an ordinary individual invest?
Potentially, if the investment permits individual participation and the person meets its requirements.
Minimum amounts, eligibility, access routes and withdrawal terms vary. Some funds mainly serve institutions or sophisticated investors.
The Financial Stability Board reports that private credit, historically dominated by institutional investors, is becoming more accessible to retail investors internationally. That does not establish access to every South African fund.
5. Who Lends the Money—and Where Does It Come From?
Specialist asset managers, direct-lending funds and other non-bank lenders can provide private credit.
Funds may receive capital from pension funds, insurers, development finance institutions and other eligible investors. Some also borrow money themselves.
The Financial Stability Board describes connections between asset managers, banks, insurers, pension funds and private equity firms.
For an African example, the IFC disclosed a proposed investment in Ninety One’s Africa Credit Opportunities 3 Fund. This illustrates how a development finance institution can contribute capital to a credit strategy.
When searching for private lending companies, identify which service you need. A personal lender, a small-business finance provider and an institutional fund may have completely different customers.
6. Private Equity vs Private Credit
The basic difference is buying ownership versus providing debt.
| Question | Private equity | Private credit |
| What does the investor provide? | Capital for an ownership interest | Financing through debt |
| Main source of returns | Business growth, distributions and sale proceeds | Interest and other contractual payments |
| Is repayment scheduled? | Usually no scheduled repayment of equity capital | Generally specified in the debt agreement |
| Position if the business fails | Owners generally rank behind creditors. | Depends on security and creditor ranking. |
| Can investors lose money? | Yes. | Yes. |
Some deals combine debt and equity-linked features. Always check the actual structure.
Ranking ahead of shareholders does not guarantee recovery. The borrower may not have enough assets to repay creditors.
7. Investment Returns, Risks and Downsides
Private credit can offer income, but a high advertised yield is not enough to assess an investment.
A hypothetical loan paying 12% annually does not automatically produce a 12% net return for investors. Fees, defaults, expenses and valuation changes can affect the result.
When comparing investments and returns, ask whether the quoted figure is a target, a historical result or a contractual payment—and whether it is before or after fees.
People researching long-term high-yield investments should also consider:
- Default risk: Borrowers may fail to repay.
- Withdrawal restrictions: Money may be inaccessible when needed.
- Valuation uncertainty: Assets may not have frequent market prices.
- Concentration: A few borrowers or sectors may dominate the portfolio.
- Leverage: Borrowing within a fund can amplify losses.
- Currency exposure: Offshore results can change when measured in rand.
The Financial Stability Board identifies borrower quality, leverage, liquidity, concentration and valuation concerns among the sector’s vulnerabilities.
Credit funds differ significantly. A secured loan to an established company has a different risk profile from financing a distressed borrower.
Security, diversification and an experienced manager can help manage risk. They do not eliminate it.
8. Is Private Credit Still Under Pressure?
There are reasons for continued scrutiny, but not enough justification to describe every fund as being in trouble.
In May 2026, the Financial Stability Board warned that private credit had expanded rapidly and had not been tested at its current scale through a severe economic downturn. It also highlighted growing connections with banks and other institutions.
This is a global assessment. It does not mean every South African lender or fund is distressed.
For a particular investment, examine current reporting on overdue loans, restructurings, losses, valuations and withdrawals. For a borrower, check the lender’s terms and ability to deliver the agreed financing.
The question is less useful as “Is all private credit safe?” and more useful as “What risks does this particular agreement expose me to?”
9. How Difficult Is It to Enter Private Credit?
The answer depends on what you want to do.
| Your goal | What determines access |
| Get a personal loan | Lender criteria, affordability and applicable rules |
| Obtain business funding | Business finances, repayment capacity and the lender’s mandate |
| Invest in a fund | Eligibility, minimum investment and product availability |
| Build a career | Relevant knowledge, experience and available roles |
For a career, useful skills include financial analysis, cash-flow modelling, due diligence, valuation and understanding loan agreements.
CFA Institute says employers value strong corporate-credit knowledge and practical experience with debt products. Related experience in banking, accounting or corporate finance can provide a foundation.
10. Where Can You Borrow or Invest?
Your starting point depends on whether you need a personal loan, business funding or an investment. The organisations below offer different services; they are examples to research, rather than recommendations.
Personal Loans for Individuals:
Personal loans are consumer credit products. They should not automatically be described as institutional private credit.
| Provider | What it offers | Official website |
| FinChoice | Personal loans, subject to assessment and lending terms | FinChoice personal loans |
| DirectAxis | Personal loans through a business unit of FirstRand Bank | DirectAxis personal loans |
| Capitec | Bank personal loans, subject to credit and affordability criteria | Capitec personal loans |
| Absa | Bank personal loans, subject to eligibility and approval | Absa personal loans |
| Wonga South Africa | Online personal lending, including short-term loans | Wonga loan information |
Bank-associated providers are included as borrowing alternatives. Their bank loans are not institutional private credit.
Business Loans and Funding
| Provider | What it offers | Official website |
| Business Partners Limited | Specialist finance for viable SMEs, including business and commercial property funding | Business Partners |
| Lula | SME funding, including fixed-term funding and a cash-flow facility | Lula |
| Merchant Capital | Merchant cash advances and other business capital solutions | Merchant Capital |
| COD Bridging Finance | Short-term secured finance for business entities | COD Bridging Finance |
| Investec Private Capital | Business capital solutions involving debt and equity | Investec Private Capital |
These providers offer different financing structures. A merchant cash advance, secured loan and equity investment are not interchangeable.
Ask about repayment frequency, total cost, security, personal guarantees and early settlement. Approval depends on the business and the provider’s criteria.
Private Credit and Debt Investments
For investors, the organisations below manage relevant credit or debt strategies. Not every fund is available directly to an ordinary individual.
| Manager or fund | Investment focus | Access considerations |
| Ninety One SA Infrastructure Credit Fund | Debt financing for infrastructure projects and businesses, primarily in South Africa | Confirm eligibility, minimum investment and distribution route. Withdrawals have limited periodic liquidity. |
| Fairtree Infrastructure Debt Fund | South African infrastructure debt | Ask about eligibility, minimum commitments, fees and withdrawal terms. |
| Prescient infrastructure and private credit strategies | Infrastructure and private credit investments | Its capability page specifically describes institutional investor access. |
| Sanlam Investments’ private debt strategies | Private debt within its alternatives business | Confirm which strategies accept new capital and whether individual investors qualify. |
| Futuregrowth’s relevant debt portfolios | Institutional financing and developmental investments | Confirm the available access route and each portfolio’s listed and unlisted debt exposure. |
These are managers and strategies to enquire about, rather than five funds confirmed as open to every individual investor.
Official investment information:
- Ninety One SA Infrastructure Credit Fund
- Fairtree infrastructure debt
- Prescient infrastructure and credit capabilities
- Sanlam Investments
- Futuregrowth developmental funds
Before comparing investment returns, request the relevant fund documents. Check whether returns are targeted or historical, whether figures include fees, and how losses or withdrawal restrictions could affect you.
A credit fund is an investment—not a savings account. Higher income potential does not guarantee repayment or easy access to your money always consider yur risk and reward when deciding to invest.
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