Tamil Nadu Ranks Second in Small Business Credit Demand: Study

Quick Summary

• Tamil Nadu is the second-largest market for small business credit in India, contributing 9.3% of the national total, as per a report by SIDBI and CRIF High Mark.
• The state’s outstanding small business credit portfolio stood at ₹4.21 lakh crore as of June 30, 2025, marking a growth of 15.7% from ₹3.64 lakh crore a year earlier.
• Maharashtra leads with ₹6 lakh crore in outstanding credit; Gujarat (₹3.69 lakh crore), Uttar Pradesh (₹3.61 lakh crore), and Karnataka (₹3.18 lakh crore) complete the top five states for portfolio size.
• Uttar Pradesh recorded the highest year-on-year growth at 20.7%.
• “Small Business” is defined as businesses with aggregated credit exposure not exceeding ₹5 crore from formal lending systems, divided into categories: enterprises, Sole Proprietors with Entity Presence, and Sole Proprietors.
• Tamil Nadu ranks second in borrower share across Sole Proprietors (11%) and Sole Proprietors with Entity Presence categories (8.8%), but third for Enterprises borrowers (7.9%). Gujarat ranks second in this segment with a share of 9.7%.
• Chennai contributes only 10.6% to Tamil nadu’s overall small business credit portfolio compared to Bengaluru’s 15.6% and Hyderabad’s 18.2% relative shares within their respective states’ portfolios.
• Loans past due between 91-180 days (“PAR”) stood at: Tamil Nadu -1.7%, National average -1 .5%, which declined from June2023’S2%.

Indian Opinion Analysis
the substantial expansion in Tamil Nadu’s small business credit portfolio underscores its economic vibrancy while positioning it strongly among India’s leading marketplaces despite Maharashtra topping figures sectorally; urban industrial loanss segments will continue Our niche AI