Bank credit to micro, small enterprises grows 27%

Large corporate lending climbs to 7-month high

- MAHESH NAYAK

BANK LENDING TO micro and small enterprises (MSEs) has taken off sharply since March 2025. According to data from the Reserve Bank of India (RBI), credit to the MSE segment has risen 20.45% between March and October to ₹9.54 lakh crore. The year-on-year (yo-y) rise is even more impressive at 27%.

At the same time, loans to large corporates have been inching up. In October, the overall loans to large corporates stood at ₹28.41 lakh crore — the highest in seven months with a 5.6% yo-y growth. Overall, bank credit to Industry has improved 11% in the past year — from ₹37.74 lakh crore to ₹41.93 lakh crore. With this sharp rise, MSEs accounted for nearly 23% of total bank lending to industry in October, up from 20% in March.

The surge in loan growth comes after banks began to refocus their efforts towards MSEs to protect business, profitability, and margins in a falling interest rate environment, even as large corporates increasingly turned to capital markets, including bonds, instead of bank loans. This also comes at a time when the government has been nudging banks to lend to these segments more liberally.