India’s small business credit sector has shown steady growth, reaching Rs 49.2 lakh crore by March 2026, marking a 13.4% increase from the previous year. The number of active loans has also risen to 7.5 crore as of March 2026, as per the CRIF High Mark report.
The report highlights that individual business borrowers, especially sole proprietors, are the main drivers of small business loan growth, constituting 80% of the portfolio and over 87% of active loans. Loan against property (LAP) remains the dominant product in the portfolio, accounting for 27.1% share.
Among the top 10 states, Andhra Pradesh and Uttar Pradesh have shown significant year-on-year growth in their small business credit portfolios. Tamil Nadu has emerged as a mature market with a 11.6% increase in outstanding portfolio, emphasizing improving asset quality.
Enterprise term loan growth has slowed to 4.7% year-on-year, signaling opportunities for lenders to support MSMEs in technology upgrades, sustainability, and capacity expansion. Manufacturing sector holds a significant share of enterprise term loans, while services and trading sectors together form a substantial portion.
