The corporate regulator is threatening Australia's nascent private lending industry with tighter regulation if it does not see a significant lift in standards.

The rapidly growing lending sector, known as private credit, has extended around $200 billion worth of loans, much of it to higher-risk real estate players and property developers at interest rates well above those offered by banks.

It raises most of its money from private investors via both wholesale and retail funds.

The Australian Securities and Investments Commission (ASIC) has released a lengthy paper outlining ways to bring the sector into line with practices in the banking sector.

ASIC chairman Joe Longo stressed that the aim of the exercise was to encourage investment by ensuring confidence in both public and private mar

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