Mumbai: CRIF High Mark, one of India’s leading credit bureaus, has released a special edition of its CRIF High Mark MSMEx Spotlight report titled “Early Indicators of Geopolitical Impact,” offering an in-depth assessment of how India’s MSME ecosystem is responding to global uncertainties.
The report highlights that while MSMEs continue to demonstrate resilience, certain credit and lending indicators are beginning to reflect the impact of ongoing geopolitical developments.
According to the CRIF High Mark MSMEx Spotlight, moderation in credit growth across borrower segments and lender categories, coupled with a rise in early-stage delinquencies in select segments, may indicate the initial effects of broader global uncertainty.
The report also notes slightly increasing stress levels in the manufacturing sector and among specific lender categories, warranting close monitoring in the coming months.
India’s MSMEx (Micro, Small, Medium Exposure Businesses) credit exposure stood at approximately ₹46 lakh crore as of April 2026, representing a year-on-year growth of 12.8%.
The growth has been supported by improvements in asset quality, broader geographic and sectoral participation, and policy interventions such as credit guarantee and liquidity support schemes.
However, findings from the CRIF High Mark MSMEx Spotlight reveal that between December 2025 and April 2026, portfolio outstanding (POS) growth slowed to 3.1%, compared with 9.7% during the corresponding period of the previous year.
Active loans also declined by 3.5%, suggesting that geopolitical uncertainty may be beginning to influence domestic MSMEx credit supply.
Growth Continues but Momentum Slows Across Borrower Segments
The CRIF High Mark MSMEx Spotlight indicates that although overall credit expansion remains positive, growth has moderated across micro, small, and medium borrower categories.
The micro credit segment, which accounts for nearly 86% of active MSMEx loans, experienced contraction in both portfolio outstanding and loan volumes between December 2025 and March 2026.
POS declined by 3.1%, while active loans fell by 4.6% during the period. The report, however, notes that signs of stabilization were visible by April 2026.
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Manufacturing and Trade Continue to Dominate Credit Exposure
Manufacturing and trade sectors together account for more than 60% of the overall POS share and remain key pillars of the MSMEx ecosystem.
According to the CRIF High Mark MSMEx Spotlight, both sectors witnessed a slowdown in growth between December 2025 and April 2026.
Manufacturing growth moderated to 4.3%, compared to 10.4% during the previous year. In addition, sectors such as shipping and transport, food processing, and auto and ancillaries recorded moderate declines in portfolio outstanding, albeit from a relatively smaller base, amid prevailing global uncertainties.
The report also highlights a marginal increase in early-stage delinquencies within manufacturing. PAR 31–90 rose from 1.6% in March 2026 to 1.8% in April 2026.
While these movements may be influenced by cyclical factors, the report suggests continued observation to determine whether the trend persists.
Lending Activity Moderates Across Lender Categories
The CRIF High Mark MSMEx Spotlight points to a broad-based moderation in lending activity across all lender categories.
Over the past two years, PSU banks have gradually ceded market share to NBFCs and other lender groups.
Between December 2025 and March 2026, NBFC portfolios declined by 1.6%, compared with growth of 6.4% during the same period a year earlier. PSU banks also recorded a contraction of 0.2%, compared with growth of 3.5% in the previous year.
While private banks continue to maintain the largest portfolio share, the report notes that credit expansion has become increasingly cautious across the lending ecosystem.
Working Capital Utilization Remains Stable but Requires Monitoring
The CRIF High Mark MSMEx Spotlight notes that term loans continue to account for approximately 50% of total MSMEx portfolio outstanding, while the remainder is distributed across working capital products such as cash credit and overdraft facilities.
Working capital utilization reached around 73% for cash credit facilities and approximately 70% for overdraft products in March 2026, making them important indicators to monitor.
Although overall portfolio quality remains stable and PAR 90+ has improved slightly on a year-on-year basis, certain early-warning indicators have emerged. Between March 2026 and April 2026:
- Manufacturing sector PAR 31–90 increased from 1.6% to 1.8%.
- PSU bank PAR 31–90 rose from 2.7% to 3.0%.
- Cash credit product PAR 31–90 increased from 1.6% to 1.9%.
The report identifies these developments as early signals that require close observation during the current period of uncertainty.
The micro segment also continues to exhibit comparatively higher early-stage delinquency levels. As of April 2026, PAR 31–90 stood at 2.7% for micro businesses, exceeding corresponding levels in small and medium business categories.
Regional Trends Present Mixed Signals
According to the CRIF High Mark MSMEx Spotlight, western and southern India continue to dominate the MSMEx landscape, together contributing more than 60% of total portfolio outstanding.
At the same time, growth momentum is increasingly being driven by northern and southern regions. The report also highlights differences in borrower behaviour.
Businesses with multiple active loan accounts account for nearly 70% of total portfolio outstanding and continue to demonstrate stronger repayment performance and lower delinquency levels than borrowers with only a single active loan.
Continued Vigilance Needed Amid Global Uncertainty
The CRIF High Mark MSMEx Spotlight concludes that India’s MSME sector remains fundamentally resilient despite ongoing geopolitical uncertainty.
However, moderation in credit growth, softer lending activity, and rising stress indicators in select borrower segments and sectors suggest that early signs of pressure are beginning to emerge.
