These economic dynamics underscore the need for flexible financing options that allow mid-market companies to seize growth opportunities while weathering potential market disruptions.
Asian economies have demonstrated remarkable resilience in the face of global economic headwinds. Vietnam's economy grew 6.9% year-on-year in 2024, the Philippines expanded 6.3%, and Malaysia registered 5.9% growth, according to recent data from McKinsey & Company. This strong performance has been driven by robust domestic consumption, manufacturing sector rebounds, and impressive export growth across the region.
However, current geopolitical tensions are creating new challenges. The recent implementation of U.S. tariffs, particularly on Vietnam, poses significant risks to regional growth. If the proposed 46% tariffs on Vietnamese exports are enacted, they would force businesses to reassess their supply chains, with companies that shifted production to Vietnam as part of "China Plus One" strategies now facing difficult decisions about future operations.
Despite these challenges, Asia's fundamental growth drivers remain strong. India and Southeast Asia have maintained impressive GDP growth rates of 6.5% and 4.7%, respectively, over the past five years. These thriving economies require substantial growth capital, particularly in capital-intensive sectors like renewable energy, data centers, industrial parks, and warehousing.
"Companies operating in developing countries in Asia stand at a critical juncture," observes Alexander Christy Jr., founder and CEO of. "While trade tensions create near-term uncertainty, the region's economic fundamentals, demographic advantages, and growing middle class continue to make it an attractive long-term investment destination."
A significant obstacle to sustained growth in Asia is access to capital, particularly for mid-market companies that form the backbone of many regional economies. Banks remain the dominant providers of credit across Asia Pacific, accounting for approximately 79% of loans, compared with 54% in Europe and just 33% in the US, according to KKR research. This concentration of lending through traditional banking channels creates vulnerability, especially during periods of economic uncertainty.
The situation has been particularly challenging for mid-market companies in emerging Asian economies. According to a recent Bain & Company report, private credit represents just 4% of total alternative assets under management in Asia-Pacific, compared to 16% in Europe and 15% in the US. The private credit sector holds significant growth potential because banks are increasingly reluctant to lend to mid-market companies or businesses that are more complex to evaluate. This creates a critical funding gap that limits growth potential for otherwise promising businesses.
Estimates suggest there is approximately $2.4 trillion in annual financing needed for small and medium-sized enterprises across developing economies in Asia Pacific. This represents a substantial market opportunity for who can bridge this gap.
And prior to the tariffs, recent market developments suggested potential relief ahead for Asian businesses. The Asia-Pacific loan market showed signs of recovery in late 2024, with loan volumes reaching $164 billion in the final quarter바카라”the strongest fourth-quarter performance in three years.
The financing gap facing mid-market Asian companies has accelerated the growth of alternative financing models. According to HSBC, Asia's private credit markets continue to attract investors seeking returns and companies needing more-nuanced and bespoke borrowing solutions. This has driven Asia-focused private debt assets under management to grow at an average rate of 29% over the past five years.
Several factors are contributing to this trend. First, regulatory changes are making traditional bank lending more restrictive, particularly for mid-market companies with growth potential but limited collateral assets. Second, economic uncertainty and geopolitical tensions have made banks more conservative in their lending practices, reducing available capital for businesses.
like that provided by offers a one potential option for Asian businesses with substantial equity holdings but limited access to traditional credit. This model enables companies to access capital by financing against publicly traded securities while maintaining long-term positions.
This arrangement is particularly relevant for family-owned businesses, which represent a significant portion of Asian corporate entities. Family-owned businesses dominate regional capital markets, accounting for over 60% of listed companies in Southeast Asia. These companies often hold substantial equity assets but may struggle to access traditional bank financing for operational needs or expansion.
Family-owned businesses are foundational for many Asian economies and represent significant growth potential. The Asia-Pacific region contains approximately 50% of Credit Suisse's ranked 1,000 family-owned businesses globally. These businesses range from small enterprises to major conglomerates like Samsung Electronics, Toyota Motor Corporation, and Reliance Industries.
According to McKinsey analysis, the number of single-family offices in Hong Kong and Singapore, the main hubs for such entities in Asia-Pacific, has quadrupled since 2020 to approximately 4,000. These family offices are increasingly seeking diversified investment opportunities and specialized financial services.
Despite global uncertainties, Asia's economic outlook for 2025 remains relatively strong compared to other regions, though with varying prospects across different countries. According to the Asian Development Bank, regional growth is forecast at 4.9% in 2025 and 4.7% in 2026, with inflation moderating to 2.3% in 2025 and 2.2% in 2026.
South Asia stands out as a particularly promising region. The ADB projects South Asia to remain the fastest-growing subregion, with robust domestic demand boosting growth across several economies. Growth in the subregion is expected to rise from 5.8% in 2024 to 6.0% in 2025 and 6.2% in 2026. India's continued economic expansion provides both domestic opportunities and potential spillover benefits for businesses throughout the region.
However, this growth outlook is clouded by several risk factors. As noted by Morgan Stanley's Chief Asia Economist Chetan Ahya, three critical factors will shape Asia's economy in 2025: tariffs, the power of the U.S. dollar, and the strength of domestic demand.
The semiconductor industry continues to be a bright spot in the regional economy. According to Nomura analysis, global semiconductor shipments are expected to grow by 9.3% in 2025, driven primarily by artificial intelligence demand. This growth benefits not just major tech exporters like Taiwan and South Korea but creates opportunities throughout the supply chain for mid-market companies providing components, services, and infrastructure.
These economic dynamics underscore the need for that allow mid-market companies to seize growth opportunities while weathering potential market disruptions. Traditional bank lending may become increasingly cautious in the face of economic uncertainty, but alternative financing models like equities-based financing offer a pathway for businesses to access capital while maintaining strategic flexibility.
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