Mumbai, July 14: CRIF High Mark has released the fourth edition of CRIF–SIDBI Small Business Spotlight Report (July 2026) – data as of March 2026, which highlights the continued resilience of India’s small business credit ecosystem amid external uncertainties, supported by a conducive macroeconomic and policy environment. The report covers businesses ‘with aggregate credit exposure of up to ₹5 crore’, including sole proprietors (with and without entity presence) and commercial enterprises, with data as of March 2026.
Key Trends
- India’s small business credit ecosystem continues to expand steadily despite external headwinds. As of March 2026, total portfolio outstanding (covering sole proprietors and enterprises) stood at ₹49.2 lakh crore, registering a robust growth of 13.4% YoY and nearly 3% QoQ, with active loans reached 7.5 crore.
- Sole proprietors i.e. individual business borrowers continue to drive the credit growth of small business loans, accounting for 80% of the portfolio and over 87% of the active loans (inclusive of those with entity presence).
- Loan against Property (LAP) continues to be the dominant product in the consolidated portfolio (27.1% [1]POS share) , followed by business loans (24.8%) and working capital products (22.8%). LAP share grew from 25.5% in Mar’25 to 27.1% in Mar’26, driving growth, highlighting the continuing importance of secured credit in the MSME sector.
- At the national level, the top 10 states account for 72% of POS, underscoring small credit concentration in some regions. Growth as of Mar’26 is led by AP (16.5% YoY, 5.6% QoQ) and UP (18.5% YoY, 4.5% QoQ), while Beyond Top 100 cities outperformed others with a 21.6% CAGR between Mar’23–Mar’26.
- Asset quality in the PAR 90+ segment improved from 4.2% in Mar’25 to 4.0% in Mar’26, with improvements across both PAR 91–180 and PAR 180+ buckets, reflecting moderate credit risk amidst an uncertain external environment.
Tamil Nadu – State in focus Tamil Nadu is a mature small business credit market, accounting for about 10% of India’s overall small business portfolio outstanding and 9% of active loans as of Mar’26.
- The state’s POS stood at ₹4.6 lakh crore in Mar’26, up 11.6% YoY, while active loans were 66.7 lakh, up only 0.5% YoY, indicating a clear shift toward higher ticket size lending.
- Tamil Nadu’s portfolio is concentrated in a few large districts, with Chennai and Coimbatore leading the state (19% of POS together), while growth is increasingly broadening into districts such as Krishnagiri (14.9% YoY), Kancheepuram (14.6% YoY), and the rest of the state (13.7% YoY).
- State level credit quality has improved, with PAR 91-180 easing to 1.4% in Mar’26 from 1.5% in Mar’25, , though Chennai cluster credit portfolio remains on watch with respect to some manufacturing industries.
- NBFCs are the largest lender group in Tamil Nadu, holding 37% of portfolio outstanding as of Mar’26, well above the national share (29%), with share increasing from 34.5% in Mar’25 in TN, underscoring their strong role in financing the state’s small business segment
- For enterprises with aggregate credit exposure below ₹5 crore, manufacturing in TN accounts for 33.8% of the portfolio. Between Mar’23 and Mar’26, it recorded a moderate 3-year CAGR of 3.2%, underscoring sectoral maturity. Analysis of the top five industry clusters shows growth increasingly driven by non-traditional districts.
Deep dive on Enterprise Term Loans
- The enterprise term loan book[2] stood at ₹6.7 lakh crore in Mar’26, making up 25.9% of overall term loan portfolio outstanding across both sole proprietors and enterprises.
- Growth in enterprise term loan portfolio outstanding slowed to 4.7% YoY in Mar’26 from 14.5% YoY in Mar’25, highlighting the available opportunity for lenders to finance technology upgradation, sustainability initiatives and capacity expansions in the MSME sector apart from their working capital requirements.
- Active loans in enterprise term loans declined 2.7% YoY in Mar’26, indicating slower account addition but with a shift toward higher ticket size lending.
- Delinquency in enterprise term loans remained broadly controlled, with PAR 31-90 and PAR 91-180 stable at 3.6% and 1.6% respectively as of Mar’26.
- Manufacturing accounted for 31.3% of enterprise term loan share, while services and trading together formed 47.6%, showing a diversified sector mix.
- Growth in manufacturing linked enterprise term loans was concentrated in core districts, with Bengaluru, Jaipur, Pune, and Rajkot driving key growth and trends.