New Delhi, Nov. 12 -- India is considering giving regulated private credit funds greater loan-recovery powers to boost lending and widen funding options for businesses. A high-level panel, headed by Niti Aayog member Rajiv Gauba, is weighing a proposal to grant them secured creditor status under the loan recovery law, two people aware of the discussions said.

Easier credit recovery could reduce these funds' risks, lower borrowing costs and boost loan flow to small and medium enterprises, the people said on the condition of anonymity. For the funds, easier loan recovery could offer some parity with banks and non-banking financial companies (NBFCs), and help them find new funding sources.

"The panel is considering the pros and cons of suc...