How Did MSME Credit Exposure Surge 17.8% to Rs 43.3 Lakh Crore Driven by Small Firms?
Synopsis
The latest report reveals a remarkable growth in credit exposure among India's MSMEs, with a significant year-on-year increase. This trend highlights the resilience of small and medium businesses and their pivotal role in India's economic landscape. Discover how these enterprises are shaping the credit market.
Key Takeaways
MSME credit exposure reached Rs 43.3 lakh crore .
17.8% annual growth in credit exposure reported.
Small businesses now hold 39.5% of the credit share.
Improved loan quality with PAR at 1.6% .
Term loans account for over half of medium enterprise exposure.
New Delhi, Dec 8 (NationPress) The credit exposure for India’s micro, small, and medium enterprises (MSMEs), defined as those with borrowings up to Rs 100 crore, reached Rs 43.3 lakh crore as of September, marking a significant 17.8% annual increase and remaining stable compared to the previous quarter, according to a report released on Monday.
The number of active loans saw a 5.7% year-on-year growth, totaling 192.9 lakh, as indicated by the report from CRIF High Mark. This growth reflects a trend where the expansion of the loan portfolio is outstripping the growth in the number of borrowers, alongside a noticeable shift towards larger loan amounts and more established customer profiles.
Small businesses experienced the most substantial increase in their share of credit exposure, rising to 39.5% from 38.4% the previous year.
The medium-sized sector followed suit, growing its share from 22.5% to 23.1% and maintaining consistent growth on a quarter-to-quarter basis. Despite micro enterprises making up the majority of active loans at 86.4%, their overall credit exposure remained constant this quarter.
Overall portfolio quality improved, with the MSMEs Portfolio at Risk (PAR) for loans overdue by 91–180 days falling to 1.6% as of September 2025, which is an enhancement from the previous quarter. More borrowers have been successfully categorized into the Very Low and Low Risk brackets across various segments.
“The MSME credit landscape in India continues to showcase resilience amid the country’s broader economic evolution. While micro borrowers still represent the bulk of loan volumes, the genuine credit momentum is pivoting towards small and medium enterprises,” stated Sachin Seth, Chairman of CRIF High Mark and Regional Managing Director for CRIF India & South Asia.
Public Sector Undertaking (PSU) banks primarily lend to micro enterprises, holding a 36.3% market share, whereas private banks dominate the small and medium segments with 46.4% and 47% shares respectively, as per the report findings.
Non-Banking Financial Companies (NBFCs) have also expanded their presence, increasing their shares to 20.1% in the micro segment, 13.9% in small, and 15.7% in medium enterprises.
Term loans are prevalent in MSME credit, especially for medium enterprises, where they comprise over half of the total exposure.
Maharashtra continues to be the largest market, with outstanding credit exposure of Rs 7 lakh crore, showcasing robust year-on-year growth.
Point of View
It's clear that the growth in MSME credit exposure is a positive sign for India's economic recovery and development. This trend underscores the importance of supporting small and medium enterprises, which are essential for job creation and innovation in our economy.
NationPress
11 May 2026
Frequently Asked Questions
What is MSME credit exposure?
MSME credit exposure refers to the total amount of loans extended to micro, small, and medium enterprises, which are critical for driving economic growth and employment.
What was the percentage increase in MSME credit exposure?
The MSME credit exposure increased by 17.8% year-on-year, reaching Rs 43.3 lakh crore .
Which segment of MSMEs showed the highest growth?
Small businesses recorded the highest increase in credit exposure share, rising to 39.5% .
How has the quality of MSME loans changed?
The overall quality of MSME loans has improved, with the Portfolio at Risk (PAR) for 91-180 days falling to 1.6% .
Who are the main lenders for MSMEs?
PSU banks are the primary lenders to micro enterprises, while private banks dominate lending to small and medium enterprises.
