As of March 2025, outstanding credit to the MSME segment stood at Rs 40.4 lakh crore, reflecting a 20.1% y-o-y growth. Encouragingly, asset quality continues to improve, indicating stronger borrower discipline and deepening confidence among lenders and investors, states a report by CRIF High Mark.
The MSMEx (micro, small and medium exposure) Spotlight Report observes that PSU banks dominate micro exposure business lending (45.7% market share), private banks lead small and medium exposure businesses (50% market share), and NBFCs continue expanding across borrower segments.
Small exposure businesses account for the largest share of overall credit outstanding (40%), while micro exposure businesses lead in volume (81.1%). Micro-exposure businesses have seen substantial growth in credit exposure. This trend is further reflected in Udyam Assist Platform registrations, which aim to integrate micro-enterprises into the formal sector, granting them access to government schemes and collateral-free loans, crucial for their expansion and long-term sustainability.
As of June 24, 2025, the Udyam and Udyam Assist portals had over 6.5 crore registered enterprises, with micro businesses comprising 6.4 crore of them.
Across borrower segments, working capital loans dominate, accounting for around 50% of the total, reflecting the cyclical and operational demands of businesses. Meanwhile, the share of term loans for micro exposure businesses has risen marginally from 37.5% in March 24 to 39.7% in March 25, indicating growing lender confidence in the sector, supported by regulatory schemes and incentives, the report observes.
