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Small Biz Credit Hits Rs 47.8 Lakh Cr, NBFCs & Women Borrowers Drive Growth

India's small business credit exposure grew by 14.9% year-on-year to reach Rs 47.8 lakh crore in December 2025. Sole proprietors remain the backbone, accounting for nearly 80% of the total portfolio, with significant growth in lending to women and borrowers under 35. NBFCs have expanded their market share to 28%, playing a particularly strong role in lending to sole proprietors. Credit penetration is deepening beyond major cities, with aspirational districts seeing sharp growth and improving asset quality.

Key Points: India's Small Business Credit Up 15% to Rs 47.8 Lakh Cr

  • 15% credit growth to Rs 47.8 lakh crore
  • Sole proprietors form 80% of portfolio
  • NBFCs expand share to 28%
  • Women borrowers rise to 23.9%
2 min read

India's small business credit rises 15 pc to Rs 47.8 lakh crore in December 2025: Report

SIDBI-CRIF report shows 15% credit growth for small businesses, led by sole proprietors and NBFCs. Women & youth participation rises.

"Sole proprietors continued to anchor the small business lending space, accounting for nearly 80 per cent of total portfolio outstanding. - CRIF-SIDBI Report"

New Delhi, April 2

India's small business credit ecosystem maintained stable momentum in the December 2025 quarter, with total credit exposure rising 14.9 per cent year-on-year to Rs 47.8 lakh crore, a report showed on Thursday.

The joint analysis by the CRIF and the SIDBI highlighted that sole proprietors continued to anchor the small business lending space, accounting for nearly 80 per cent of total portfolio outstanding.

Pure sole proprietors accounted for 62.5 per cent of active loans and 73 per cent of total borrowers, it said.

Overall origination value grew 13.3 per cent year-on-year between December 2024 and December 2025, with sole proprietor originations rising 15 per cent, supported by higher participation of women borrowers at 23.9 per cent and borrowers below 35 years of age.

Average ticket size in the sole proprietorship segment remained stable at Rs 3.34 lakh.

Moreover, the non-banking financial companies (NBFCs) expanded their share of the small business loan portfolio to 28 per cent in December 2025, from 26.8 per cent a year earlier.

Their presence was particularly pronounced in sole proprietor lending, where they accounted for 41.6 per cent of the outstanding portfolio.

Meanwhile, portfolio quality remained stable, with portfolio at risk for 31-90 days at 3.5 per cent and 91-180 days at 1.3 per cent, broadly unchanged from September 2025.

Credit penetration deepened beyond large urban centres, with beyond-top-100 cities now representing close to 40 per cent of sole proprietor credit. The top ten states accounted for nearly 72 per cent of the total portfolio, with Uttar Pradesh, Telangana, and West Bengal contributing most to incremental growth.

Credit in aspirational districts grew sharply at 18.4 per cent year-on-year to Rs 3.2 lakh crore, with asset quality also improving as portfolio at risk for 91-180 days declined from 1.8 per cent to 1.4 per cent.

In addition, formalisation continued to deepen, with 23.3 per cent of sole proprietor originations and 11 per cent of enterprise originations over the past 12 months coming from new-to-credit borrowers. The share of very low and low risk borrowers rose from 64.8 per cent to 69.1 per cent for enterprises and from 50.3 per cent to 55.8 per cent for sole proprietors between December 2023 and December 2025.

- IANS

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Reader Comments

S
Shreya B
The rise in women borrowers to nearly 24% is the most encouraging part for me. It shows more women are stepping into entrepreneurship. However, I hope the average ticket size for women-led businesses is also increasing and not just the number of loans. The journey has begun, but there's a long road ahead for true parity.
V
Vikram M
Good to see credit reaching beyond top cities. Tier 2 and 3 cities are where real growth potential lies. NBFCs doing 41.6% of sole proprietor lending is interesting - they are often more flexible than big banks. Hope this trend continues and interest rates remain manageable for small businesses.
A
Aman W
While the numbers look positive, I have a respectful criticism. The report says "portfolio quality remained stable," but 3.5% PAR for 31-90 days is not insignificant. In a tough economic climate, we must ensure this growth isn't fueled by risky lending. Stability is good, but sustainability is better.
P
Priyanka N
The growth in aspirational districts by 18.4% is heartening! Financial inclusion is happening on the ground. When credit reaches these areas, it creates local jobs and reduces migration to cities. UP, Telangana, and Bengal leading incremental growth shows a healthy geographical spread. 👍
K
Karthik V
As a young entrepreneur, I'm glad to see the mention of borrowers below 35. The future is in the hands of the youth, and access to capital is our biggest hurdle. The formalisation data (23.3% new-to-credit) is also promising - bringing more businesses into the formal economy benefits everyone in the long

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