The growth of private debt has been remarkable in recent years, driven by the need for alternative financing in the face of bank credit constraints. This boom has transformed access to capital for companies and projects, catalyzing economic development, innovation and growth in key sectors in emerging and developed markets.

Access to finance is key to social development. However, small and medium-sized enterprises (SMEs), which account for a large share of employment in vulnerable communities, face significant barriers to accessing traditional credit.

In this sense, private debt has proven to be an effective solution by offering capital with conditions specifically designed for these companies, allowing them to grow and generate jobs, impacting the lives of millions of people.

Impact, Integration and Social Development

Private financing of real estate projects with subsidies has been a growing trend, where not only private companies but also public entities have made efforts to reduce the housing deficit in our country.

Today, DS19 and DS49 projects have proliferated thanks to state guarantees for real estate and construction companies, as well as the high demand for housing, due to Chile's housing deficit.

Although private credit is mostly used in the real estate industry, it can be found in all types of industries, such as healthcare, mining, automotive, agriculture, to name a few.

Another way to see the impact and development of this type of financing is through social enterprises, sustainable businesses that have a direct impact on communities. Here there are initiatives ranging from personal finance to companies that seek to democratize access to quality education, such as, for example, Lab4U.

Despite the potential of private debt, it is critical that private debt players adopt a more transparent and development-oriented approach. Tools such as social bonds and impact metrics are essential to ensure that these investments are actually generating tangible benefits for communities.

Commitment to purpose

At Fynsa, we believe that investments can and should be an engine for social change. Throughout our history, we have developed investment funds that not only seek financial returns, but also generate significant impact.

Our commitment is reflected in housing projects with DS19 subsidies, which facilitate access to decent housing, and in initiatives that bring access to credit to underbanked segments of the population. underbanked segmentsWe also support individuals, families and SMEs, with a view to the country's progress. In addition, the partnership with the Sentido Foundation Foundation reinforces our focus on generating positive social impact.

For us, investing means building a more inclusive future.

Beyond capital

Private debt has the power to transform communities by providing real solutions to problems that affect millions of people. From financing social infrastructure to supporting SMEs and inclusive entrepreneurship, this sector is proving that finance can be an engine for human development.

Ultimately, the challenge is not just to mobilize capital, but to ensure that this capital builds a future where social inclusion is a reality for all. The success of private debt should not only be measured by its financial return, but also by its ability to transform lives and create stronger, more cohesive communities..

DISCLAIMER

Raimundo Fuenzalida

Portfolio Manager Private Debt Fynsa AGF