LONDON Korean homebuyers and Chinese small firms, Brazilian motorists and Turkish banks are now among the main culprits in running up emerging market debt, replacing governments who have largely put their books in order.
Investors' eagerness to lend at record low interest rates in a world awash with cheap money is seducing companies and households, and threatening to counter a decade of government efforts to lower debt ratios.
The emerging sovereign debt that was so blighted by default in the past may well be on firmer ground.
But the steady climb in private debt is alarming for those who have bought into emerging markets either as a low-debt alternative to the over-leveraged West or in the hope that a long history of debt default in developing countries has passed.
There are many ways to slice and dice it but one data set from JPMorgan shows private sector debt in hard currency is now around $4 trillion. That is triple 2005 levels, JPM estimates.
Sovereign dollar debt rose a third in this time to $1.5 trillion, it says. But relative to gross domestic product (GDP) it is down by a third.
What's more, external and bond market debt is only the iceberg's tip.
First, household indebtedness is in most cases rising faster than economic growth in order to fund cars, homes and holidays. Second, much of the new debt may lie outside bond markets, in less transparent financing vehicles.
So what is the true extent of developing world debt?
David Spegel, head of emerging debt at ING, reckons bond market financing, whether in dollars or local currencies, accounts for only a fifth of total emerging market indebtedness.
He estimates total emerging debt at $66.3 trillion, of which the public sector accounts for less than $10 trillion. That equates to 256 percent of gross domestic product, not far under U.S. gross indebtedness of around 350 percent of GDP.
Back in 2008, emerging debt came to just $35 trillion, Spegel told Reuters. Of this, sovereign debt was $6.4 trillion.
"It's easy to think emerging markets are less risky when you are only looking at the most transparent part of their debt which is the bond market," he said. "If the bulk of emerging debt is in non-transparent forms, it raises the question of what underlying risks this entails for the economy."
Take China. Proliferation of shadow banking - lending by businesses other than banks - prompted Fitch to cut China's local debt rating this month. It puts total Chinese indebtedness at 200 percent of GDP, not far off Greece's 260 percent.
HOUSEHOLDS, COMPANIES, NOT GOVERNMENTS
The borrowing boom erodes one of the main rationales for emerging market investing: low debt ratios.
Emerging sovereign debt averages just a third of GDP, compared with over 100 percent in the United States or Italy.
But governments who have tackled public debt are finding it far harder to control private debt - indeed, regulatory clampdowns on excessive bank lending may be driving the industry underground, as China's example shows.
Credit demand is also down to a shift in growth away from exports towards domestic demand, RBS analysts say. This has left households more vulnerable to any property price falls and a potential rise in interest rates, RBS says.
What is worrying in most cases is not the level but the pace of credit growth. In Brazil, for instance, household debt has doubled since 2005 to around 45 percent of disposable income.
Korean household debt has grown an average 9 percent every year since 2005 to hit 156 percent of disposable income in 2012. A central bank survey earlier this year highlighted household debt as the biggest risk to the Korean financial system.
Many will argue companies are doing the right thing by locking in cheap funds while they can. And currency mismatches are actually lower than before the 1997 crisis when local borrowing was not an option in most emerging markets.
But emerging companies that are taking in more debt and hard currency exposure could prove vulnerable to an eventual rise in global rates, the International Monetary Fund said in its latest Global Financial Stability Report.
That may already be happening. Emerging corporate default rates in 2012 exceeded the global rate for only the fourth time in 16 years, Standard & Poor's says. The other times were 1998, 1999 and 2002 - crisis years in Asia, Russia and Argentina.
"When funds leave for developed markets as their economies recover, a lot of Asian borrowers may find interest rates rise sooner and faster than they expected," S&P senior director for sovereign ratings Kim Eng Tan said.
"Our concern is that if they don't step on the brakes now (on private borrowing) there could be problems later."
(Reporting by Sujata Rao; Editing by Ruth Pitchford)