India’s Small Business Credit Rises 15 Per Cent To ₹47.8 Lakh Crore In Dec 2025, Sole Proprietors Lead Growth: 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.

Sole proprietors dominate lending landscape

The joint analysis by CRIF and 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.

Loan origination and borrower trends

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.

NBFCs expand share in lending

Moreover, 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.

Portfolio quality remains stable

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 expands geographically

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.

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Formalisation and borrower quality improve

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.

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