Small business credit exposure rises 16% to ₹46 trillion: CRIF-Sidbi report | Economy & Policy News – Business Standard

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Small business credit exposure rose 16.2 per cent to ₹46 trillion as of September 2025, though growth moderated from the previous quarter amid cautious underwriting and seasonality

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India’s aggregate small business credit exposure rose 16.2 per cent year-on-year (Y-o-Y) to ₹46 trillion as on September 30, from ₹39.6 trillion a year earlier. The growth rate has moderated from the previous quarter’s 19.3 per cent Y-o-Y, possibly reflecting more cautious underwriting and seasonal variations. 

Comprehensive policy initiatives for the MSME sector, including implementation of several government credit schemes, have played a key role in sustaining strong credit growth. Sole proprietors continue to dominate the credit ecosystem, accounting for around 80 per cent of total credit and nearly 90 per cent of borrowers. 

“Private lenders continue to lead enterprise lending, closely followed by public-sector banks. NBFCs are steadily increasing their presence, especially among sole proprietors, accounting for over 41 per cent of lending in this segment,” according to the release.

For enterprises, working capital loans dominate and account for nearly 57 per cent of outstanding credit.  Term loans continue to support capital expenditure. Among sole proprietors, loans against property remain the largest category, followed by business loans and commercial vehicle loans. Unsecured lending has grown by 31 per cent Y-o-Y, even amid concerns around stress. 

Sachin Seth, chairman, CRIF High Mark and regional managing director for CRIF India and South Asia, said borrowers with both individual and enterprise credit presence were contributing a steadily rising share of overall credit exposure, and this segment has recorded the strongest growth in exposure over the year. “Together, these trends indicate that credit deepening and gradual formalisation are progressing in parallel as small businesses scale.” 

Active loan volumes grew 11.8 per cent Y-o-Y, slightly below POS growth, indicating steady expansion. Asset quality strengthened, with portfolio at risk (PAR) 91-180 improving from 1.7 per cent in September 30, 2023, to 1.4 per cent in September 30, 2025, driven by proactive monitoring and sharper risk selection. Enterprises continue to show lower risk profiles. Sole proprietors have also seen steady improvement. The share of very low and low-risk borrowers increased between September 2023 and September 2025, supported by better underwriting practices and wider use of digital data.