Mumbai: The CRIF SIDBI Small Business Spotlight Report (July 2026), released by CRIF High Mark with data as of March 2026, highlights the continued resilience of India’s small business credit ecosystem despite external uncertainties.
According to the CRIF SIDBI Small Business Spotlight Report, a supportive macroeconomic environment and policy measures have helped sustain steady credit growth while maintaining stable asset quality across the small business segment.
The report covers businesses with aggregate credit exposure of up to ₹5 crore, including sole proprietors with and without entity presence as well as commercial enterprises, based on data as of March 2026.
India’s Small Business Credit Portfolio Continues to Expand
According to the CRIF SIDBI Small Business Spotlight Report, India’s small business credit ecosystem continued its steady expansion during the year despite external headwinds.
As of March 2026, the total portfolio outstanding (covering sole proprietors and enterprises) reached ₹49.2 lakh crore, registering 13.4% year-on-year (YoY) growth and nearly 3% quarter-on-quarter (QoQ) growth. Active loans also increased to 7.5 crore.
Sole proprietors continued to remain the primary driver of small business credit growth, accounting for 80% of the overall portfolio and more than 87% of active loans, including borrowers with entity presence.
Loan Against Property Remains the Largest Credit Product
The CRIF SIDBI Small Business Spotlight Report noted that Loan Against Property (LAP) remained the dominant product within the consolidated portfolio, accounting for 27.1% of the portfolio outstanding (POS).
Business loans contributed 24.8%, while working capital products accounted for 22.8%.
The report observed that the share of LAP increased from 25.5% in March 2025 to 27.1% in March 2026, highlighting the continued importance of secured lending in India’s MSME sector.
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Andhra Pradesh and Uttar Pradesh Lead Growth
At the national level, the top ten states accounted for 72% of the portfolio outstanding, indicating concentration of small business credit across select regions.
Among major states, Andhra Pradesh recorded 16.5% YoY and 5.6% QoQ growth, while Uttar Pradesh registered 18.5% YoY and 4.5% QoQ growth.
The report also highlighted that areas beyond the top 100 cities outperformed other regions, delivering a 21.6% CAGR between March 2023 and March 2026.
Asset Quality Shows Improvement
The CRIF SIDBI Small Business Spotlight Report found that asset quality continued to improve across the small business credit ecosystem.
The PAR 90+ segment improved from 4.2% in March 2025 to 4.0% in March 2026. Improvements were also recorded across both the PAR 91–180 and PAR 180+ buckets, reflecting moderate credit risk despite an uncertain external environment.
Tamil Nadu Emerges as a Mature Small Business Credit Market
The CRIF SIDBI Small Business Spotlight Report identifies Tamil Nadu as a mature and resilient small business credit market.
The state accounted for around 10% of India’s total small business portfolio outstanding and 9% of active loans as of March 2026.
Tamil Nadu’s portfolio outstanding stood at ₹4.6 lakh crore, reflecting 11.6% YoY growth, while active loans reached 66.7 lakh, growing only 0.5% YoY, indicating a shift towards higher-ticket lending.
The report stated that the state’s portfolio remained concentrated in a few major districts, with Chennai and Coimbatore together accounting for 19% of the portfolio outstanding.
Growth, however, is increasingly expanding into districts including:
- Krishnagiri (14.9% YoY)
- Kancheepuram (14.6% YoY)
- Rest of Tamil Nadu (13.7% YoY)
- Tamil Nadu’s Credit Quality Improves
State-level credit quality also strengthened during the year.
The PAR 91–180 ratio eased to 1.4% in March 2026 from 1.5% in March 2025, although the report noted that the Chennai cluster credit portfolio remains on watch with respect to some manufacturing industries.
NBFCs Continue to Lead Lending in Tamil Nadu
According to the CRIF SIDBI Small Business Spotlight Report, NBFCs remained the largest lender category in Tamil Nadu.
They accounted for 37% of the state’s portfolio outstanding as of March 2026, significantly higher than the national average of 29%.
Their share increased from 34.5% in March 2025, underscoring their growing role in financing Tamil Nadu’s small business segment.
For enterprises with aggregate credit exposure below ₹5 crore, manufacturing accounted for 33.8% of the state’s portfolio.
Between March 2023 and March 2026, the manufacturing segment recorded a 3-year CAGR of 3.2%, reflecting sectoral maturity, while growth across the top five manufacturing clusters was increasingly driven by non-traditional districts.
Enterprise Term Loan Portfolio
The CRIF SIDBI Small Business Spotlight Report also examined enterprise term loans in detail.
The enterprise term loan portfolio stood at ₹6.7 lakh crore as of March 2026, accounting for 25.9% of the overall term loan portfolio outstanding across sole proprietors and enterprises.
Growth in enterprise term loan portfolio outstanding slowed to 4.7% YoY in March 2026 compared with 14.5% YoY in March 2025.
The report highlighted opportunities for lenders to finance technology upgradation, sustainability initiatives, capacity expansion, and working capital requirements in the MSME sector.
Active enterprise term loans declined 2.7% YoY, indicating slower account additions while reflecting a transition towards higher-ticket lending.
Delinquency levels remained broadly stable, with PAR 31–90 at 3.6% and PAR 91–180 at 1.6% as of March 2026.
Manufacturing accounted for 31.3% of enterprise term loans, while services and trading together represented 47.6%, indicating a diversified industry mix.
The report further noted that growth in manufacturing-linked enterprise term loans was concentrated in core districts, with Bengaluru, Jaipur, Pune, and Rajkot emerging as key growth centres.
