How has MSME credit exposure surged by 17.8% to Rs 43.3 lakh crore?
Synopsis
Discover how India's MSME sector is thriving, with credit exposure reaching Rs 43.3 lakh crore, marking a significant year-on-year growth of 17.8%. This report sheds light on the shifting dynamics within the lending landscape, showcasing the increasing importance of small and medium enterprises.
Key Takeaways
MSME credit exposure reached Rs 43.3 lakh crore .
17.8 percent year-on-year growth.
Small businesses now hold 39.5 percent share of credit.
Portfolio quality has improved, with 1.6 percent at risk.
Term loans are critical for medium enterprises.
New Delhi, Dec 8 (NationPress) The credit exposure for India’s micro, small, and medium enterprises (MSMEx) that are eligible for loans up to Rs 100 crore reached Rs 43.3 lakh crore in September, reflecting a 17.8 percent increase year-on-year and remaining stable on a sequential basis, according to a report released on Monday.
The number of active loans rose by 5.7 percent year-on-year, totaling 192.9 lakh. The report from CRIF High Mark indicates a portfolio growth that outstrips borrower expansion, alongside a trend toward larger loan amounts and more established customer profiles.
Small enterprises saw the most significant rise in credit exposure, increasing their share from 38.4 percent to 39.5 percent compared to the previous year.
Following a similar pattern, the medium sector increased its share from 22.5 percent to 23.1 percent, with consistent growth observed over the last quarter. Micro businesses still dominate with 86.4 percent of active loans, although their overall credit exposure remained stable this quarter.
The quality of the portfolio has continued to improve, with the overall MSMEx Portfolio at Risk (PAR) for 91–180 days at 1.6 percent as of September 2025, showing advancement from the prior quarter. More borrowers are now classified as Very Low and Low Risk across all categories.
“The resilience of India’s MSME credit ecosystem is evident as the country undergoes significant economic transformation. While micro borrowers still form the backbone of loan volumes, the actual credit momentum is increasingly shifting 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 continue to be the primary financiers for micro enterprises, holding a 36.3 percent market share, while private banks lead in small and medium categories with 46.4 percent and 47 percent respectively, the report noted.
Non-Banking Financial Companies (NBFCs) have also expanded their presence, increasing their market share to 20.1 percent in micro, 13.9 percent in small, and 15.7 percent in medium segments.
Term loans are the predominant form of MSME credit, particularly for medium enterprises, where they represent over half of the total exposure.
With an outstanding exposure of Rs 7 lakh crore, Maharashtra remains the largest market, demonstrating robust year-on-year growth.
Point of View
I believe that this report highlights a pivotal moment for India's MSME sector. The growth in credit exposure indicates a positive trend in economic resilience and adaptability. It is essential for policy-makers to support this transformation, ensuring that micro and small enterprises continue to thrive.
NationPress
12 May 2026
Frequently Asked Questions
What is the current credit exposure for MSMEs in India?
As of September, the credit exposure for MSMEs in India has reached Rs 43.3 lakh crore.
What percentage increase has been recorded in MSME credit exposure?
There has been a 17.8 percent increase in MSME credit exposure year-on-year.
Which segment of MSMEs saw the highest increase in credit exposure?
Small businesses experienced the largest increase, raising their share of exposure from 38.4 percent to 39.5 percent.
What role do PSU banks play in MSME lending?
PSU banks are the leading lenders for micro enterprises, holding a 36.3 percent market share.
How are term loans significant for MSMEs?
Term loans dominate MSME credit, especially for medium enterprises, where they account for more than half of the total exposure.
