Business loans to individual entrepreneurs grew faster than those to commercial entities over three years even as outstanding commercial credit rose to Rs 65.8 lakh crore, up 14 per cent YoY, a report said on Friday.
The report from TransUnion CIBIL and SIDBI said loans to individuals accounted for 28 per cent of outstanding commercial balances while loans to entities made up 72 per cent.
Individual borrower balances grew 1.8 times during the three-year period between March 2023 and March 2026, compared with 1.5 times growth in entity borrower balances during the same period.
Business loans to entrepreneurs drive India’s commercial credit growth
“India’s commercial credit market is seeing a shift in borrower composition, with individual borrowers with business-oriented loans now forming a meaningful share of overall commercial credit balances,” the report said.
As of March 2026, 2.8 crore individual borrowers had active business‑oriented loans, with 43 per cent classified as early‑stage commercial entities with less than 24 months of credit history.
Almost half (48 per cent) of the share of the total Non-Banking Financial Companies’ (NBFCs) Commercial Balances pertained to individual borrowers. All other lender categories have a much lower share, with private banks the second largest at 24 per cent of the commercial balance share among individual borrowers.
Loans against property and commercial vehicles dominate MSME borrowing
The individual borrower segment has been increasingly visible across key commercial credit products. Loans against property formed the largest share of outstanding balances for this borrower group, followed by commercial vehicle loans and unsecured business loans.
At a product level, individual borrowers accounted for 68 per cent of loans against property balances, 76 per cent of commercial vehicle balances and 67 per cent of unsecured business loan balances.
The report noted that loans against property, commercial vehicle loans, unsecured business loans, term loans, overdraft and cash credit together formed roughly 87 per cent of outstanding commercial credit balances.
TransUnion CIBIL sees evolving MSME credit landscape
Bhavesh Jain, MD & CEO, TransUnion CIBIL, highlighted individual business borrowing is an integral part of how commercial credit is evolving, adding that it deserves to be understood within the broader MSME credit landscape.
“As MSMEs grow, their credit needs also change, from small-ticket working capital to larger, sector-led funding requirements. The real opportunity for the credit ecosystem lies in understanding this progression with greater clarity, especially as borrowers move from individual business borrowing to entity-level credit, or from trade-led borrowing to manufacturing-led expansion,” Jain added.
The share of new-to-credit (NTC) entities in origination volumes declined from 52 per cent in FY23 to 42 per cent in FY26, indicating that the pace of first-time formal credit onboarding has moderated in recent years.
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