Small Business Loan Book Reaches Rs 49.2 Lakh Crore in FY26

According to a newly released report in Chennai, India’s small business lending portfolio grew by 13.4% year-on-year to reach ₹49.2 lakh crore as of March 2026. The CRIF–SIDBI Small Business Spotlight Report highlighted that the sector added nearly ₹5.9 lakh crore in outstanding credit during the fiscal year, despite a moderation in growth from 17.3% recorded in the previous year.

The total outstanding credit portfolio rose from ₹43.3 lakh crore in March 2025 to ₹49.2 lakh crore in March 2026. On a sequential basis, the portfolio also recorded an increase from ₹47.8 lakh crore in December 2025.

The volume of active small business loans also expanded during this period. The number of active loans reached 7.5 crore in March 2026, up from 6.7 crore in March 2025, representing an 11.7% year-on-year increase.

Sole proprietors remained the primary drivers of this credit expansion. This segment accounted for nearly 80% of the total outstanding portfolio and over 87% of active loans, including those with an entity presence.

In terms of credit products, Loan Against Property (LAP) emerged as the largest category. LAP accounted for 27.1% of the consolidated outstanding portfolio in March 2026, rising from 25.5% in March 2025. This increase highlights the ongoing significance of secured credit for the micro, small, and medium enterprise (MSME) sector.

Other major credit products included business loans, which made up 24.8% of the portfolio, and working capital products, which accounted for 22.8% of the total outstanding credit.