The MSME Pulse Special Edition Report, June 2025 provides a comprehensive analysis of the transformation in the MSME credit landscape over the last five years, FY20- FY25.
The commercial credit portfolio (exposure < ₹50 crore) has grown at compounded annual growth rate (CAGR) of 13%, reaching ₹ 35.2 lakh crore as of Mar ‘25. During the last 5 years, the number of credit active entities surged by 65%.
The borrower segment with aggregate credit exposure ₹1–10 crore has emerged as the backbone of commercial credit, accounting for 42% of the outstanding portfolio balances as of Mar’25 and growing at a 14% CAGR over the past five years.
Entities in borrower segment with aggregate credit exposure below ₹1 crore witnessed credit supply growth from ₹1.4 lakh crore to ₹2.5 lakh crore from FY ‘20 to FY ’25. This segment also onboarded 13.2 lakh new-to-credit (NTC) entities in FY ‘25 representing 55% of all originations.
As of Mar ’25, overall balance-level delinquencies - defined as accounts 90 to 720 DPD or classified as ‘sub-standard’ - dropped to a 5-Year low of 1.8%, which is less than half the pre-pandemic level of 3.9% recorded in Mar ’20. However, there has been a rising trend in such delinquencies in the below ₹1 crore category to 3.1% in Mar’25 from 2.9% in Mar’24.
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