Private credit yet to be “stress-tested”, says ex-RBI governor Raghuram Rajan

The Punchline

Raghuram Rajan highlighted that private credit has become essential in addressing the infrastructure financing gap. However, he expressed concerns that it has yet to face rigorous stress tests to assess its resilience against economic fluctuations.

Why You Should Read This

This article provides critical insights from a prominent economist on the current state of private credit and its future stability, making it vital for stakeholders in the finance and investment community.

Who This Is For

This article is targeted at institutional investors, credit analysts, and private equity professionals who are involved in or considering investments in private credit.

Investor Implications

The developments discussed in the article suggest that while private credit plays a crucial role in funding infrastructure, its lack of stress testing raises concerns for investors about potential risks. This uncertainty may impact investment strategies and risk assessments moving forward.