New Delhi, Dec 26 (NationPress) The total credit exposure for small businesses in India has surged to Rs 46 lakh crore, reflecting a remarkable increase of 16.2 percent year-on-year, according to a report released on Friday.

The analysis from CRIF High Mark and SIDBI indicated that the number of active loan accounts rose by 11.8 percent, reaching 7.3 crore, bolstered by government credit schemes and supportive policy measures aimed at micro, small, and medium enterprises.

The findings also highlighted that among businesses with credit exposure up to Rs 5 crore, there is a notable trend toward formalization, with 23.3 percent of borrowers being new to credit and 12 percent new to enterprise borrowing as of September 2025.

This report showcases a robust and progressively strengthening small business credit landscape. Credit portfolios are consistently expanding, with gradual advancements in formalization and increasing participation from lenders, while asset quality remains positive.

Sole proprietors dominate the credit landscape, accounting for approximately 80 percent of total credit and nearly 90 percent of all borrowers. This segment, particularly sole proprietors, experienced the highest growth rate of 20 percent, primarily driven by loans secured against property.

The report states, “Private banks are at the forefront of enterprise lending, closely trailed by public sector banks. Non-banking financial companies (NBFCs) are steadily enhancing their presence, particularly among sole proprietors, now comprising over 41 percent of lending in this segment.”

Working capital loans make up almost 57 percent of the total outstanding credit, while term loans continue to facilitate capital investments.

Among sole proprietors, the largest category pertains to loans against property, followed by business loans and commercial vehicle loans. Despite stress-related concerns, unsecured lending has seen a year-on-year growth of 31 percent.

“Sole proprietors remain the backbone of India’s small business credit ecosystem, making up nearly 80 percent of the borrower base as of September 2025. The deepening of credit and gradual formalization are advancing side by side as small businesses grow,” stated Sachin Seth, Chairman of CRIF High Mark and Regional Managing Director for CRIF India and South Asia.

Regions such as Maharashtra, Tamil Nadu, Uttar Pradesh, and Gujarat lead in overall portfolio size, while Telangana, Andhra Pradesh, and West Bengal exhibit strong growth trends. The manufacturing sector leads in absolute credit exposure, while the services sector has recorded a growth of 19.6 percent year-on-year.