In September 2025, the joint report “Small Business Spotlight”, released by the Small Industries Development Bank of India (SIDBI) and credit bureau CRIF High Mark, provided an in-depth understanding of the lending trends among small businesses.
- Maharashtra remained the largest market with Rs 6.0 lakh crore in outstanding credit, while Tamil Nadu (Rs 4.21 lakh crore), Gujarat (Rs 3.69 lakh crore), Uttar Pradesh (Rs 3.61 lakh crore), and Karnataka (Rs 3.18 lakh crore) round out the top five by portfolio size.
- Uttar Pradesh registered highest outstanding portfolio growth of 20.7% on a year-on-year basis.
Exam Hints:
- What? Small business spotlight report released
- By whom? CRIF high mark and SIDBI
- 3 segments: Enterprises, Sole proprietors with Entity presence, Sole proprietors
- Credit growth – 19.3%, Rs.15.3 lakh cr
- Top states – Maharashtra, TN, Gujarat
- Top Cities – Mumbai, Delhi, Bengaluru
Key Highlights
Geographic Analysis:
Portfolio Outstanding: Top five states collectively accounted for 46% of the total portfolio outstanding as of June 2025.
District wise: Mumbai, Delhi, and Bengaluru lead in portfolio outstanding, contributing 4.4%, 3.8%, and 3.0% respectively to the national portfolio as of June 2025.
- Jaipur and Ahmedabad posted the highest YoY growth among top districts, at 19.1% and 19.0% respectively.
Rural-Urban: As of June 2025, urban regions continue to account for the largest share of total portfolio outstanding at 51.9% and rural exposure at 29.0%.
| Top states in terms of Portfolio outstanding | ||||
|---|---|---|---|---|
| S.No | States | Portfolio outstanding (Rs. Thousand cr) | Y-o-Y growth (%) | % Share |
| 1 | Maharashtra | 606.2 | 16.4 | 13.4 |
| 2 | Tamil Nadu (TN) | 421.9 | 15.7 | 9.3 |
| 3 | Gujarat | 369.2 | 17.8 | 8.2 |
| 4 | Uttar Pradesh (UP) | 361.7 | 20.7 | 8.0 |
| 5 | Karnataka | 318.6 | 15.3 | 7.0 |
Small Business: The report defines “Small Business” as businesses with an aggregate credit exposure not exceeding Rs.5 crore(cr) from the formal lending system.
Borrower Segments
Segments: The study analyzes three borrower segments, namely:
- Enterprises – This includes borrowings availed in the name of a trade or business entity.
- Sole Proprietors with Entity Presence – It includes borrowers who have availed business purpose loans both in their personal capacity and in the name of their trade or business.
- Sole Proprietors – It comprises of self-employed individuals who have availed business-type loans in their personal names.
Segmental performance analysis:
- Sole Proprietors – They contributed to over 75% of the outstanding small business credit and more than 85% of active loans.
- Enterprises – It recorded the highest portfolio growth, with a 24.7% YoY increase in outstanding credit
- Sole Proprietors with Entity Presence – They experienced the fastest growth in borrower count, rising by 9.3% YoY.
Credit Landscape
Credit growth: India’s total small business credit exposure registered a robust year-on-year (YoY) growth of 19.3%, reaching Rs. 45.3 lakh cr as of June 2025.
- The number of active small business loans increased by 8.7% YoY to 6.9 crore, highlighting sustained credit demand and improved access, supported by expanding digital lending initiatives.
Lender Landscape: Private sector banks hold the largest share in the overall small business credit portfolio at 34.4%.
- Non-Banking Financial Companies (NBFC) dominate lending to sole proprietors, accounting for 42.4% of the portfolio outstanding.
- Although Public Sector Banks (PSB) overall market share is declining, they remain key lenders for loans lesser than Rs. 10 lakhs to enterprises and sole proprietors with entity presence.
Portfolio distribution: Low-exposure loans (less than Rs. 10 lakh) account for 72.5% of active loans but only 17.8% of the outstanding portfolio as of June 2025.
