In short
Private credit is lending that happens outside public markets. For most of its history it was reached only by institutions, because the minimums ran to millions and the funds were not marketed to individuals. That has changed in three ways: listed vehicles that can be bought like a share, funds with lower minimums aimed at individuals, and direct private lending arrangements where capital is placed with a registered credit provider and earns interest as borrowers repay. Each has a different minimum, a different liquidity profile and a different thing to check before committing.
01 — The category
What private credit is, briefly
Private credit is lending arranged privately — directly between a lender and a borrower — rather than through public bond markets or the traditional bank-deposit system. If a company raises money by issuing a listed bond, that is public. If it borrows through a privately arranged facility, that is private credit.
It grew into one of the largest corners of global finance after banks retreated from certain kinds of lending, and other lenders moved into the space they left. That is the whole story of why the phrase appears everywhere now.
The relationship worth holding
Private credit is the asset class. Private lending is the activity — providing capital as the lender and earning a return as it is repaid. One names the category; the other names what you actually do. Private lending sits inside private credit.
For an individual, the second framing is the more useful one, because it keeps the question that matters in view. In private credit the return is a repayment. The thing to understand is never the asset class — it is the borrower.
02 — The barrier
Why the door has been shut to individuals
Every institutional explanation of private credit ends at the same place: high minimums. Historically, private credit in South Africa and elsewhere was the territory of pension funds, asset managers, insurers and high-net-worth clients of private banks, with entry points running into millions of rand.
There were sound reasons. Private loans are illiquid, they require underwriting and administration, and funds structured for institutions carry reporting obligations that do not scale down easily. It was not a conspiracy; it was economics.
The consequence, though, was a genuine gap. Individuals kept reading that a large and growing corner of finance existed, and kept finding that every route into it began with a number they did not have. A great deal of what is written about private credit is written for people who already have access, by organisations who serve them.
03 — The routes
The three routes that exist now
| What it is | What to check | |
|---|---|---|
| Listed vehicles | Funds or notes listed on an exchange and bought like a share | The underlying loans, fees, and how it trades |
| Lower-minimum funds | Private credit funds structured for individuals | Minimum, term, fees, and who manages it |
| Direct arrangements | Capital placed with a registered credit provider, earning interest as borrowers repay | The NCRCP registration, the borrower class, the agreement |
Listed vehicles solve liquidity and minimums at once: they can be bought in small amounts and sold on an exchange. What you give up is directness — the price moves with the market as well as with the loans, and there are layers of fees between you and the interest.
Lower-minimum funds sit between the two. Access improves, the underlying is still a managed pool, and the fee stack still exists.
Direct arrangements are the plainest version and the one closest to lending itself. Capital is placed with an organisation that is a registered credit provider; it lends to a defined borrower class; you earn interest as those borrowers repay. There is no market price to watch and usually no daily liquidity — the capital is committed for a term.
04 — The diligence
What to check, whichever route you take
The questions are the same across all three, because the risk is the same: a return that depends on borrowers repaying.
- Who is borrowing, and why? A named class with a specific reason to need money and a specific source of repayment. Not a category.
- Who grants the credit, and are they registered? In South Africa a credit provider lending to consumers must be registered with the National Credit Regulator. Ask for the NCRCP number; check it at ncr.org.za.
- What is the term, and can I reach the money? Illiquidity is the defining feature of private credit. Know exactly when you can have your capital back.
- What am I actually paid, and how? Interest, periodically? Accrued and paid at the end? Gross or net of fees?
- What happens on default? What security exists, who enforces it, and what the realistic recovery looks like.
Return type
Interest — income, not capital growth
Taxed as
Interest income at your marginal rate
Main trade-off
Liquidity — capital is committed
Main risk
Borrowers not repaying
05 — Where ProLend fits
Where ProLend fits
ProLend distributes the third route: direct private lending arrangements in South Africa, where capital is placed and earns interest as borrowers repay. It is not a fund, it is not listed, and it is not the lender — the lending is administered by BC Funding Solutions (Pty) Ltd, a registered credit provider, NCRCP 11132 and FSP 55147.
That route is the plainest of the three and the least abstract: there is a defined borrower class, an identifiable credit provider, an agreement that states what you are owed, and a return that is interest rather than a price. What it does not offer is daily liquidity — capital is committed for a term, which is the trade every private credit arrangement makes in one form or another.
ProLend’s consultants explain how the arrangements work and introduce clients. They are not financial advisers and do not make recommendations about your circumstances.