Why India's private credit funds are turning to AI
What's the story
India's private credit funds are increasingly adopting artificial intelligence (AI) into their operations, a recent EY report has shown. The technology is being used for deal sourcing, data analysis and credit assessment. While most players are using it selectively, a few have integrated it deeply into their investment processes. The survey found that 67% of respondents use AI moderately, mainly for data analysis and monitoring purposes.
Technology integration
Deep integration of AI tools in investment processes
The EY report also revealed that 11% of respondents have made AI tools a core part of their origination and credit analysis processes.
Meanwhile, another 22% are in the early stages of adoption, piloting these tools.
This indicates a gradual shift in how private credit funds evaluate potential deals and monitor borrowers with the help of AI technology.
Market dynamics
Market outlook remains positive
The report is part of a broader assessment of India's private credit market, which has grown in the first half of 2026 despite global economic uncertainty, geopolitical tensions, and commodity price pressures.
Private credit funds are witnessing demand from stress-related situations, capital expenditure requirements, and mergers and acquisitions financing.
The report also found that 60% of survey respondents are optimistic about this asset class over the next one to two years.
Future prospects
Evolving landscape for private credit
The report also looked into the impact of geopolitical tensions on deployment activity.
It found that 40% of respondents reported no change in their deployment pace, while another 40% had slowed it down due to increased caution over sectors and geographies.
These findings indicate that AI adoption in private credit is likely to deepen as funds move beyond experimentation toward greater use in origination, underwriting, and ongoing portfolio monitoring.