Small Business Credit Grows 16.2% In 2025 To Rs 46 Lakh Crore: CRIF-SIDBI Report

New Delhi, Dec 27 (KNN) Aggregate small business credit exposure in India recorded a 16.2 percent year-on-year growth in 2025, reaching Rs 46 lakh crore, according to the CRIF-SIDBI Small Business Spotlight Report.

The report noted active loan accounts rose 11.8 percent to 7.3 crore, reflecting strong credit uptake aided by policy measures and MSME schemes. Portfolio quality improved, with 91-180-day overdue loans falling to 1.4 percent from 1.7 percent.

Borrower Profile and Credit Segmentation

Sole proprietors continue to anchor India’s small business credit ecosystem, accounting for nearly 80 percent of the borrower base as of September 2025, reported FE.

Borrowers with both individual and enterprise credit presence contributed a steadily rising share of overall credit exposure and showed the strongest growth over the year, according to Sachin Seth, Chairman, CRIF India.

Lending Institutions and Patterns

Private banks lead in enterprise lending, closely followed by public sector banks, while NBFCs are increasingly active among sole proprietors, now accounting for more than 41 percent of lending in this segment. 

Working capital loans remain the dominant category, representing 57 percent of outstanding credit, while term loans continue to support capital expenditure. 

Among sole proprietors, loans against property constitute the largest category, followed by business loans and commercial vehicle loans. Notably, unsecured lending grew by 31 percent year-on-year, despite concerns around stress.

Formalisation and New-to-Credit Borrowers

The report also highlighted the increase in formalisation, with 23.3 percent of borrowers new to credit and 12 percent new to enterprise borrowing as of September 2025, indicating that more businesses are entering the formal financial system.

(KNN Bureau)