The findings are from CRIF High Mark’s latest MSMEx Spotlight report on clusters and industrial activity, based on data as of June 2026.
For this report, CRIF High Mark groups businesses by their outstanding credit exposure rather than using the government’s MSME classification. Micro businesses are those with exposure of up to ₹2 crore, small businesses have exposure of more than ₹2 crore and up to ₹20 crore, and medium businesses have exposure of more than ₹20 crore and up to ₹100 crore.
Credit portfolios of small and medium businesses grew 20.3% and 21.3%, respectively, during the year, while the micro segment saw little change.
In other words, “flat” micro lending means the total amount of credit outstanding to this segment was broadly unchanged from a year earlier, even as lending to small and medium businesses grew at a much faster pace.
Micro businesses nevertheless accounted for 84.4% of all active MSME loan accounts, suggesting significant scope for further credit expansion and formalisation among smaller enterprises.
Manufacturing leads credit growth
Manufacturing recorded the strongest growth among the major MSME activities, with portfolio outstanding rising 17.4% year-on-year in June.
Trading followed with 12.7% growth, while services remained broadly unchanged, rising just 0.2%.
Within manufacturing, Engineering & Machinery had the largest share of outstanding credit, followed by Agro Products & Forestry, Chemicals, Basic Metals and Textiles.
Retail Trade and Wholesale Trade were the biggest activities within the trading segment.
More lending is flowing into established clusters
MSME credit is also becoming increasingly concentrated in districts that already have large industrial and trading bases.
The number of districts with more than ₹1,000 crore of outstanding credit has risen sharply over the past three years in sectors such as Engineering & Machinery and Wholesale Trade.
Engineering & Machinery saw the number of high-density hubs almost double to 47 from 24 over three years. These hubs now account for 63.5% of the sector’s total credit portfolio.
Chemicals has 24 mature clusters accounting for 53.1% of sector credit, with Ahmedabad and Mumbai emerging as key centres.
Textiles remains more concentrated in established centres. Its 15 major clusters account for 60.8% of sector credit, with Surat alone accounting for 19.4%.
Wholesale Trade recorded the sharpest expansion in high-volume districts. Their number more than doubled to 119 from 54 over three years, with these districts now accounting for 71.7% of the sector’s credit portfolio.
Retail Trade also expanded its geographic footprint, with high-volume districts increasing to 189 from 143. These districts account for 75.1% of the industry’s credit portfolio.
Private banks remain dominant
Private banks continued to be the leading lender type across major industrial and trading hubs, including Surat, Ahmedabad, Tiruppur and Rajkot.
NBFCs, however, have increased their share in some industrial activities, including Chemicals.
The report said credit growth and portfolio performance varied across industries and geographies, with lending increasingly moving towards established industrial and trading centres.
