Overview

• MSME balance-level delinquencies dropped to 1.8% in March 2025, the lowest in five years, reflecting better risk management in mid-size loans.
• India’s MSME credit portfolio reached Rs 35.2 lakh crore, a 13% year-on-year increase primarily driven by lending to existing borrowers.
• Smaller loans under Rs 50 lakh experienced slight deterioration in asset quality, with delinquency rates rising marginally in this segment.
• New-to-credit borrowers accounted for 47% of new loan originations in Q1 2025, with public sector banks leading at 60% of these loans.
• Credit demand grew 11% in Q1 2025, but credit supply fell 11% during the same period due to lender caution amidst external headwinds.