Why do people invest in debt?
When most people think of “debt,” they imagine something negative—obligations, leverage, risk of default. Yet investors deliberately buy debt issued by corporations, governments, and banks. For them, debt means something different: it’s an asset that earns income. While borrowers take on obligations, investors buy the right to receive interest and principal payments over time. In practice, this makes debt one of the oldest and most important asset classes in global finance.
A short history: how debt became an investment
For centuries, lending has been one of the most reliable ways to build wealth: from royal bonds financing wars to mortgage lenders earning interest on property loans. From medieval city-states to the British Empire, sovereign debt allowed governments to finance wars and infrastructure by borrowing from citizens.
By the 20th century, mortgages had evolved into securitised instruments that could be traded globally, turning real-estate debt into a major investment class. Historically, this was available only to banks and institutional investors. Retail investors rarely had direct access to these markets. Today, fintech platforms are opening the door, making debt products a transparent and accessible way to generate stable income.
Debt investing is not niche — it’s the world’s largest market
Today debt investing attracts both institutional and individual investors because it offers a structured, transparent way to generate income while managing risk.
Debt investments come in several forms. The most traditional are government bonds, where investors lend to states in exchange for fixed interest payments, and corporate bonds, issued by companies to finance operations or expansion. There are also municipal bonds that fund public projects, mortgage-backed and asset-backed securities linked to real estate or consumer loans, and a fast-growing category of private debt, where investors lend directly to businesses or property developers outside the public markets.
Beyond the public markets, a fast-expanding private-debt segment has emerged, where investors participate directly in real-estate-secured loans rather than buying publicly traded securities. According to McKinsey’s Global Private Markets Report (2025), private debt remained one of the most resilient asset classes in 2024. While global fundraising slowed slightly to around $166 billion according to PitchBook or $169 billion according to McKinsey’s report, the sector continued to outperform other private-market asset classes such as private equity and venture capital. This resilience reflects ongoing investor confidence in asset-backed lending models, including real-estate-secured credit offering stable, collateral-supported returns even in changing market conditions.
Asset-backed debt investment
Asset-backed debt, such as obligations secured by real estate or other tangible collateral, offers additional protection against default and inflation, making it particularly attractive during periods of market volatility. As a recent research explains, asset-backed funds expanded rapidly after the 2008 financial crisis, when traditional banks and public institutions reduced long-term lending and private investors stepped in to bridge the funding gap.
Private asset-backed debt investment market expanded rapidly in the 2010s as private investors and fintech platforms stepped in where traditional banks reduced real-estate lending. Today, platforms such as Indemo make it possible for individual investors to buy fractional shares of these loans gaining exposure to tangible assets. In general, asset-backed debt means that every loan is supported by a real, income-producing asset such as property, vehicles, or other tangible collateral. Asset-backed securities (ABS) and private real-estate debt are investment products built typically on pools of loans, where investors receive payments generated by the borrowers of those underlying loans.
Compared to traditional bonds, asset-backed instruments can offer higher yields, making them a flexible alternative for income-focused investors. Real-estate-backed portfolios, like those offered on Indemo, operate on the same logic — turning everyday property loans into transparent, tangible investment opportunities.
A new era of accessible investing
For decades, debt investing was the domain of banks, funds, and institutional players — a market closed off to ordinary investors. But technology and regulation have changed that landscape. With the rise of investment platforms like Indemo, retail investors can now access new forms of alternative investments. Real-estate-backed debt portfolios make it possible to purchase portions of already-issued consumer or mortgage loans at a discount and earn income as borrowers repay. Debt may once have been viewed solely as an obligation, but today it’s also a powerful, accessible tool for building financial independence.
Indemo now brings this opportunity directly to individual investors, offering discounted, property-backed debt portfolios designed for consistency and transparency. Explore the available investment opportunities on our platform and discover how discounted debt can become one of the most reliable building blocks of long-term wealth.
Sources:
Capital Markets Fact Book - SIFMA - Capital Markets Fact Book - SIFMA
Private debt: The ultimate guide (2024) | PitchBook - PitchBook
Global Private Markets Report 2025 | McKinsey
McArthur, J. (2024). Infrastructure debt funds and the assetization of public infrastructures. Environment and Planning A: Economy and Space, 56(3), 681-698. Infrastructure debt funds and the assetization of public infrastructures - Jenny McArthur, 2024
Triani, N. V. (2023). Investment in Debt Securities on Profit and Risk Analysis. Available at SSRN 4512170. Investment in Debt Securities on Profit and Risk Analysis by Novina Vita Triani :: SSRN
Kahan, M., & Yermack, D. (1998). Investment opportunities and the design of debt securities. The Journal of Law, Economics, and Organization, 14(1), 136-151. Investment Opportunities and the Design of Debt Securities | The Journal of Law, Economics, and Organization | Oxford Academic
Ippolito, R. (2020). Private capital investing: the handbook of private debt and private equity. John Wiley & Sons. Private Capital Investing: The Handbook of Private Debt and Private Equity - Roberto Ippolito - Google Books
Ferguson, N. (2008). The ascent of money: A financial history of the world. Penguin. The Ascent of Money: A Financial History of the World: 10th Anniversary Edition - Niall Ferguson - Google Books
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