India’s small business credit hits Rs 50.9 lakh crore as sole proprietors drive growth

October 8, 2026

New Delhi: India’s small business credit portfolio reached Rs 50.9 lakh crore as of June 2026, growing 14.9 per cent year‑on‑year and 3.5 per cent quarter‑on‑quarter, reflecting sustained formalisation of business credit and strong financing demand, a report said on Thursday.

The report from CRIF Credit Information Services Private Limited and Small Industries Development Bank of India (SIDBI) said credit growth was increasingly driven by sole proprietors, whose portfolio expanded 19.3 per cent year‑on‑year.

Active loans in the segment rose 27.4 per cent, indicating broader formal credit access. Asset quality remained resilient, with Portfolio at Risk past due for 91 to 180 days improving from 1.5 per cent in June 2025 to 1.2 per cent in June 2026, the report added.

Among enterprises, manufacturing continued to anchor the portfolio, accounting for 41.92 per cent of aggregate portfolio outstanding.

Portfolio quality among enterprises improved, with the share of Very Low Risk and Low Risk exposures increasing from 66.4 per cent in June 2024 to 70.9 per cent in June 2026. The corresponding share rose from 55.1 per cent to 56.1 per cent for sole proprietors.

Credit continued to expand beyond India’s largest metropolitan centres. The share of small business credit outstanding in Beyond Top 100 cities increased to 37.2 per cent in June 2026, while sole-proprietor lending in these cities grew 24.9 per cent YoY.

Rajasthan’s small business credit portfolio reached Rs 3.4 lakh crore, accounting for 6.8 per cent of the national portfolio, and grew 16.8 per cent YoY, ahead of the national growth rate of 14.9 per cent.

Rajasthan maintained healthy portfolio performance, with Portfolio at Risk for 91 to 180 days past due at 0.9 per cent. Its enterprise portfolio also displayed a stronger borrower-risk profile, with 77.3 per cent of exposure concentrated in low-risk categories, compared with 70.9 per cent nationally.

Within Rajasthan, Sikar and Nagaur recorded YoY portfolio growth of 23.6 per cent and 21.4 per cent, respectively, signalling the emergence of growth centres beyond the state’s established districts

Manufacturing accounted for 45.4 per cent of Rajasthan’s enterprise exposure, while services recorded the strongest momentum, growing 15.6 per cent YoY.