MSME delinquencies fall to 5-year low of 1.8%: Cibil-Sidbi report

Overall balance-level delinquencies in the micro, small, and medium enterprises (MSME) segment fell 35 basis points year-on-year (Y-o-Y) to a five-year low of 1.79 per cent as of March 2025, even as the commercial credit portfolio grew 13 per cent Y-o-Y to ₹35.2 trillion during the period, according to TransUnion CIBIL and Sidbi’s MSME Pulse Report.    Balance-level delinquencies are measured as 90 to 720 days past due and classified as sub-standard. 

   “This improvement has been driven by the borrower segment with ₹50 lakh to ₹50 crore exposure, while the segment with less than ₹50 lakh exposure segment witnessed a slight deterioration in March 2025 compared to the year-ago month,” the report said.   Among lenders, private banks hold the best performing portfolio with only 1.2 per cent delinquency, while public-sector banks (PSBs) stand at 2.1 per cent as of March 2025. 

  The report also stated that commercial loan demand in the MSME segment grew by 11 per cent Y-o-Y in Q4FY25. During this period, private banks, which accounted for 42 per cent of MSME credit demand, saw an 8 per cent Y-o-Y increase in demand. On the other hand, PSBs, which represent 39 per cent of the total credit demand, grew by 15 per cent Y-o-Y.  However, commercial credit supply (by value) grew by a meagre 3 per cent Y-o-Y in FY25, with 11 per cent Y-o-Y decline in Q4FY25, possibly due to higher credit concerns among lenders arising from increased external headwinds.