365Telugu.com nolin news,Mumbai, May 23, 2025: India’s Micro, Small, and Medium Enterprises (MSME) sector witnessed a 13% year-on-year (YoY) growth in its commercial credit portfolio, reaching ₹35.2 lakh crore by March 31, 2025—up from ₹31 lakh crore the previous year. This growth was largely fueled by an increase in credit to existing borrowers, according to the latest MSME Pulse Report by TransUnion CIBIL and SIDBI.
Encouragingly, the overall serious delinquency rate—defined as loans overdue by 90 to 720 days—fell to 1.8%, marking the lowest level in the past five years.
Credit Quality Strengthens Across Key Segments
Balance-level delinquencies dropped by 35 basis points to 1.8% in March 2025 from 2.1% in March 2024. The most significant improvement was seen in the borrower segment with credit exposure between ₹50 lakh and ₹50 crore.
However, delinquencies slightly rose in smaller segments:
- Exposure up to ₹10 lakh saw an increase from 5.1% to 5.8%
- Exposure between ₹10 lakh and ₹50 lakh inched up from 2.8% to 2.9%
Credit Demand and Supply Maintain Momentum
- Demand: Commercial credit demand, measured by loan enquiries, grew 11% YoY in the March 2025 quarter.
- Supply: Overall credit supply by value grew 3% YoY in FY 2024–25.
- A notable 11% YoY decline in supply was recorded in Q4 (Jan–Mar 2025), possibly due to heightened credit risk concerns.
- New cash credit facilities remained resilient with 7% YoY growth in Q4.
New-to-Credit MSMEs Remain Strong Contributors
New-to-Credit (NTC) MSMEs comprised 47% of all new loan originations in March 2025—slightly down from 51% a year earlier.
- Public Sector Banks led NTC lending, accounting for 60% of such originations.
- Trade sector contributed 53% of NTC borrowers.
- Manufacturing sector recorded the highest YoY growth in NTC borrowers at 70%.
Although manufacturing contributed only 23% of total new loans by number, it captured 34% of loan value. However, its share of originations by value has declined, while sectors such as professional services and others have risen to 36%, up five percentage points in four years.
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Maharashtra, Gujarat, Tamil Nadu, Uttar Pradesh, and Delhi remained the top five states, collectively contributing 48% of the total loan originations by value in Q4 FY25.
- Manufacturing sector dominated lending in Maharashtra, Gujarat, Tamil Nadu, and Delhi.
- Trade sector led in Uttar Pradesh.
Leadership Insights
Mr. Manoj Mittal, Chairman & Managing Director of SIDBI, stated:
“MSMEs are vital to India’s employment and export ecosystem. While credit availability has improved, a significant credit gap remains. Empowering MSMEs through financial access, innovation, and skill development will ensure inclusive and sustainable growth for India’s economy.”
Mr. Bhavesh Jain, MD & CEO of TransUnion CIBIL, added:
“MSMEs need formal credit access and debt management tools to navigate economic fluctuations. Providing them with adequate financial resources and guidance is crucial for long-term resilience and growth.”