India’s micro, small and medium enterprise (MSME) credit portfolio rose 12.5 per cent year-on-year to ₹47.4 trillion as of June 2026, with lending increasingly concentrated in established industrial and trading clusters, according to a report by CRIF High Mark.
CRIF classifies MSMEs by credit exposure as micro (up to ₹2 crore), small (₹2-20 crore) and medium (₹20-100 crore). Small and medium enterprises drove credit growth, with their portfolios expanding 20.3 per cent and 21.3 per cent, respectively, while lending to micro enterprises remained largely stagnant.
Micro enterprises accounted for 84.4 per cent of active MSME credit accounts, suggesting further scope for credit expansion and formalisation, the report said.
Manufacturing credit grew 17.4 per cent, while trading rose 12.7 per cent. Services recorded marginal growth of 0.2 per cent. Within manufacturing, engineering and machinery accounted for the largest share, followed by agro and forestry, chemicals, basic metals and textiles.
Credit clusters deepen
The number of high-density engineering and machinery districts, where MSME credit exceeds ₹1,000 crore, nearly doubled from 24 to 47 in three years. These districts accounted for 63.5 per cent of sectoral credit. Pune, Ahmedabad, Bengaluru, Mumbai and Rajkot together accounted for 18.7 per cent.
Wholesale trade districts with high credit volumes more than doubled from 54 to 119, accounting for 71.7 per cent of wholesale trade credit. High-volume retail trade districts rose from 143 to 189 and accounted for 75.1 per cent of retail trade credit.
In chemicals, 24 mature clusters accounted for 53.1 per cent of sectoral credit, with Ahmedabad and Mumbai emerging as key hubs. In textiles, 15 clusters accounted for 60.8 per cent of credit, with Surat alone accounting for 19.4 per cent.
Private-sector banks led lending across clusters, while NBFCs increased their share in some industrial segments, including chemicals.
“High-density Engineering & Machinery districts nearly double, while Wholesale Trade hubs more than double as credit concentrates,” CRIF High Mark said, highlighting the increasing concentration of MSME credit across established clusters.
The report said the credit landscape was becoming more concentrated and differentiated, with district- and industry-level data giving lenders greater visibility into local credit patterns and opportunities.
