admin
India’s MSME credit portfolio grew 12.5 per cent year-on-year to ₹47.4 trillion as of June 2026, with lending increasingly concentrated in established industrial and trading clusters, according to a report by credit information company CRIF High Mark.
CRIF High Mark classifies businesses based on credit exposure, with micro businesses having exposure of up to ₹2 crore, small businesses between ₹2 crore and ₹20 crore, and medium businesses between ₹20 crore and ₹100 crore.
The growth in the MSME credit portfolio was driven mainly by small- and medium-exposure businesses. Their outstanding credit grew 20.3 per cent and 21.3 per cent, respectively, during the year. Credit to micro-exposure businesses remained largely stagnant.
Micro businesses, however, continued to dominate by number of accounts. They accounted for 84.4 per cent of all active MSME loan accounts, highlighting the scope for further credit expansion and formalisation, the report said.
Manufacturing and trading recorded stronger growth than services. Manufacturing credit grew 17.4 per cent year-on-year in June, while trading credit rose 12.7 per cent. Services credit was almost unchanged, growing 0.2 per cent.
Within manufacturing, engineering and machinery had the largest share of the credit portfolio. It was followed by agro products and forestry, chemicals, basic metals and textiles.
The biggest shift was seen in engineering and machinery. The number of high-density districts, with more than ₹1,000 crore of credit outstanding in the segment, rose from 24 to 47 in three years. These districts accounted for 63.5 per cent of the sector’s credit portfolio in June 2026. Pune, Ahmedabad, Bengaluru, Mumbai and Rajkot were among the key hubs, with the five together accounting for 18.7 per cent of the segment’s national credit portfolio.
Wholesale trade saw an even sharper expansion in high-volume credit districts. Their number more than doubled to 119 from 54 over three years. These districts accounted for 71.7 per cent of the sector’s credit portfolio.
“High-density Engineering & Machinery districts nearly double in three years; Wholesale Trade hubs more than double as credit concentrates in established clusters,” CRIF High Mark said.
The credit footprint of retail trade also widened. High-volume districts increased to 189 from 143 over three years and accounted for 75.1 per cent of the sector’s credit portfolio.
Credit remained more concentrated in some traditional sectors. Twenty-four mature clusters accounted for 53.1 per cent of chemicals credit. Ahmedabad and Mumbai were key hubs. In textiles, 15 clusters accounted for 60.8 per cent of sector credit, with Surat alone accounting for 19.4 per cent.
Private banks remained the leading lender type across several major clusters, including Surat, Ahmedabad, Tiruppur and Rajkot. NBFCs increased their share in some industrial activities, including chemicals.
The report said the MSME credit landscape was becoming more concentrated and differentiated across industries and geographies. “As credit increasingly shifts towards established industrial and trading hubs,” district- and industry-level data can help lenders assess credit and portfolio trends, it said.
GIPHY App Key not set. Please check settings