MSME credit exposure rises 17.8% to Rs 43.3 lakh crore, driven by small businesses

New Delhi - India’s micro, small, and medium enterprises (MSMEs) with credit exposure of up to ?100 crore recorded outstanding loans worth ?43.3 lakh crore in September, marking a 17.8% year-on-year increase and remaining flat compared to the previous quarter, according to a report released on Monday.

Active loan accounts rose 5.7% YoY to 192.9 lakh, the CRIF High Mark report said. The data indicates that portfolio growth is outpacing the increase in borrower numbers, driven by a shift toward larger loan sizes and more mature customer profiles.

Small businesses saw the largest gain in exposure share, rising to 39.5%, up from 38.4% a year earlier.

The medium enterprise segment also increased its share from 22.5% to 23.1%, while maintaining steady sequential growth. Micro enterprises continued to dominate in terms of number of active loans at 86.4%, although their overall exposure remained stable this quarter.

Portfolio quality improved further, with the overall MSME Portfolio at Risk (PAR) of 91–180 days dropping to 1.6% in September 2025, an improvement over the previous quarter. A larger proportion of borrowers has moved into the Very Low and Low Risk categories across all segments.

“India’s MSME credit ecosystem continues to demonstrate resilience alongside the country’s broader economic transformation. While micro borrowers remain the backbone in terms of loan volumes, the real credit momentum is shifting toward small and medium enterprises,” said Sachin Seth, Chairman, CRIF High Mark and Regional Managing Director – CRIF India & South Asia.

Public sector banks remain the leading lenders to micro enterprises with a 36.3% market share, while private sector banks dominate the small and medium exposure categories with 46.4% and 47% shares respectively.

NBFCs continued to expand their presence, increasing their share to 20.1% in micro, 13.9% in small, and 15.7% in medium categories.

Term loans remain the primary credit product for MSMEs, especially for medium enterprises, where they account for more than half of the total exposure.

Maharashtra continues to be the largest MSME credit market, with outstanding exposure of ?7 lakh crore, supported by strong year-on-year growth.

With inputs from IANS