Individual borrowers with business-oriented loans are emerging as a significant part of India’s commercial credit market, according to the latest MSME Pulse by TransUnion CIBIL and SIDBI.
Individual borrowers accounted for 28% of outstanding commercial credit balances as of March 2026, while entities accounted for 72%. Over the three years from March 2023, individual borrower balances grew 1.8 times, compared with 1.5 times growth in entity borrower balances.
India’s outstanding commercial credit reached ₹65.8 lakh crore across 4.4 crore active commercial trades as of March 2026, registering 14% year-on-year growth.
Bhavesh Jain, MD & CEO, TransUnion CIBIL, said: “In India’s MSME economy, the entrepreneur and the enterprise are often deeply connected, particularly in the early years of business growth. A proprietor may borrow in an individual capacity, but the credit is frequently linked to business activity, working capital needs or asset creation. This makes individual business borrowing an integral part of how commercial credit is evolving, and 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.”
The report also highlights significant scope for expanding formal MSME credit access, with nearly 41% of commercial enterprises having access to formal credit in either entity or individual capacity.
Mr Jain said: “MSMEs remain central to India’s enterprise base, employment creation and regional economic growth. As more small businesses seek formal credit, it is important to recognise the diversity within the MSME segment. A micro enterprise seeking working capital, a trade borrower operating in a local market and a manufacturing unit looking to scale will have different credit needs, business cycles and growth paths. Expanding formal credit access for MSMEs has to go hand in hand with a deeper understanding of these differences. A more granular view across sectors, ticket sizes and geographies can help the ecosystem serve smaller and emerging enterprises while maintaining a focus on sustainable credit growth.”
