New Delhi, July 14 (IANS) India’s small‑business credit ecosystem expanded to a portfolio outstanding of Rs 49.2 lakh crore, growing 13.4 per cent year‑on‑year as of March 2026, a report said on Tuesday.

The report from CRIF High Mark said quarter-on-quarter growth was nearly 3 per cent with active loans reaching 7.5 crore.

Sole proprietors continued to drive the growth, accounting for nearly 80 per cent of the portfolio and over 87 per cent of active loans.

India’s small business credit ecosystem continued to expand steadily through March 2026, supported by a conducive macroeconomic and policy environment, the report said.

Loan Against Property (LAP) remained the largest product category, accounting for 27.1 per cent of the consolidated portfolio outstanding, followed by business loans (24.8 per cent) and working capital products (22.8 per cent).

LAP’s share increased from 25.5 per cent in March 2025 to 27.1 per cent in March 2026, underscoring the continued importance of secured credit in the MSME sector.

The top ten states accounted for 72 per cent of the overall portfolio outstanding. Growth was led by Andhra Pradesh, which recorded year-on-year growth of 16.5 per cent and quarter-on-quarter growth of 5.6 per cent, and Uttar Pradesh, which posted year-on-year growth of 18.5 per cent and quarter-on-quarter growth of 4.5 per cent.

Meanwhile, locations beyond the top 100 cities outperformed with a CAGR of 21.6 per cent from 2023 to 2026.

Asset quality improved during the year, portfolio at risk for over 90 days declining to 4 per cent in March 2026 from 4.2 per cent a year earlier.

The report highlighted Tamil Nadu as a mature and resilient credit market as the state accounted for around 10 per cent of India’s small business portfolio outstanding and 9 per cent of active loans.

The state’s portfolio outstanding stood at Rs 4.6 lakh crore, up 11.6 per cent year-on-year, while active loans reached 66.7 lakh, growing 0.5 per cent year-on-year, indicating a shift towards higher-ticket-size lending.

—IANS

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