- High-density Engineering & Machinery districts nearly double in three years; Wholesale Trade hubs more than double as credit concentrates in established clusters
- Small and Medium exposure businesses drive portfolio growth, while asset quality continues to improve
CRIF High Mark today released its latest MSMEx Spotlight – Special Edition: Clusters and Industrial Activity Analysis – Where MSMEs Thrive and Why, which finds that India’s MSMEx credit landscape is increasingly shifting towards high-density industrial clusters in manufacturing and trading. Based on data as of June 2026, the report highlights how credit is becoming more concentrated in established geographic hubs across key sectors, with the scale and pace of this consolidation varying significantly across industries.
India’s aggregate MSMEx credit portfolio outstanding reached ₹47.4 lakh crore as of June 2026, registering 12.5% year-on-year growth. Growth was led by Small and Medium exposure businesses, whose portfolio outstanding grew by 20.3% and 21.3% YoY, respectively, while the Micro segment remained largely stagnant. Micro exposure businesses, however, continued to account for a dominant 84.4% of all active loan accounts, highlighting the scale of the segment and the opportunity for further credit expansion and formalisation.
The broader credit landscape also points to stronger momentum in manufacturing and trading. Manufacturing portfolio outstanding grew 17.4% YoY in June 2026, followed by 12.7% growth in trading, while services remained broadly stable at 0.2% YoY. Within manufacturing, Engineering & Machinery represented the largest share of portfolio outstanding, followed by Agro Products & Forestry, Chemicals, Basic Metals and Textiles. Retail Trade and Wholesale Trade remained the principal activities within trading.
The analysis shows that this growth is increasingly being shaped by the expansion of high-density credit clusters. The scale of this shift is particularly visible in Engineering & Machinery and Wholesale Trade, where the number of districts with more than ₹1,000 crore in portfolio out standing for the industry activity has increased sharply over the past three years. At the same time, Retail Trade has expanded its geographic footprint, while Textiles continues to remain anchored in established centres with relatively limited change in cluster concentration.
Highlights from MSMEx Spotlight – Clusters and Industrial Activity Analysis – Where MSMEs Thrive and Why:
· MSMEx credit grows 12.5% YoY to ₹47.4 lakh crore in Jun’26: Growth was led by Small and Medium exposure businesses, while asset quality continued to improve across the portfolio
· Engineering & Machinery clusters gain scale: High-density hubs increased from 24 to 47 over three years and now account for 63.5% of the sector’s credit portfolio in Jun’26
· Chemicals credit remains concentrated: Twenty-four mature clusters account for 53.1% of sector credit, with Ahmedabad and Mumbai emerging as key hubs in Jun’26
· Textiles remain anchored in traditional centres: Fifteen clusters account for 60.8% of sector credit, with Surat alone contributing 19.4% of the portfolio in Jun’26
· Wholesale Trade sees rapid cluster expansion:In Jun’26 high-volume districts increased more than doubled from 54 to 119over three years, now accounting for 71.7% of the sector’s credit portfolio
· Retail Trade credit footprint widens:In Jun’26, high-volume districts increased from 143 to 189, accounting for 75.1% of the industry’s credit portfolio
· Private banks play a dominant role across key clusters: Private banks remain the leading lender type across several major industrial and trading hubs, including Surat, Ahmedabad, Tiruppur and Rajkot, while NBFCs have strongly increased their share in certain industrial activities like Chemicals
The findings highlight a more concentrated and differentiated MSME credit landscape, with growth and portfolio performance varying across industries and geographies. As credit increasingly shifts towards established industrial and trading hubs, granular district- and industry-level insights can help financial institutions better assess emerging credit and portfolio trends.