Individual Business Credit Outpaces Enterprise Lending in Telangana and Andhra Pradesh, Signals TransUnion CIBIL & NSIC Report

Business-purpose credit extended to individual entrepreneurs grew at a Compounded Annual Growth Rate (CAGR) of 26% in Telangana and 25% in Andhra Pradesh over the last three years, significantly outstripping enterprise-level micro business lending growth of 13% and 11% respectively. According to a joint study by TransUnion CIBIL and the National Small Industries Corporation Limited (NSIC), titled Micro Business Entrepreneurs in India: Growth, Transformation & Emerging Opportunities, total outstanding Micro Business Entrepreneur (MBE) credit reached approximately ₹1.74 lakh crore in Telangana and ₹1.45 lakh crore in Andhra Pradesh as of June 2026. Nationally, MBEs account for ₹29.6 lakh crore in commercial credit, representing nearly half of the overall commercial credit portfolio, with ₹19.1 lakh crore held by individual business borrowers and ₹10.5 lakh crore by micro-business enterprises.

Product Mix, Sectoral Distribution, and Asset Quality:
Loans Against Property (LAP) represent 53% of outstanding MBE balances in Telangana—the highest among analyzed states—and 41% in Andhra Pradesh, reflecting strong demand for secured financing. Among micro businesses, trade remains a key sector, accounting for 33% of outstanding balances in Telangana and 43% in Andhra Pradesh, while manufacturing contributes 17% and 18% respectively. Non-Banking Financial Companies (NBFCs) support significant individual entrepreneur financing across both states, holding nearly 48% of individual borrower balances in Andhra Pradesh and 38% in Telangana. Portfolio performance remains healthy, with 90+ days delinquency standing at 1.7% in Telangana and 2.1% in Andhra Pradesh, while national delinquency levels improved from 3.0% in June 2023 to 1.9% in June 2026.

The ‘Missing Middle’ and Formalization Opportunity:
The report identifies a substantial opportunity to transition creditworthy individual business borrowers into formal enterprise-level credit structures. Approximately 19.6 lakh individual entrepreneurs in Telangana (62% showing strong creditworthiness) and 23.8 lakh in Andhra Pradesh (61% possessing CIBIL Scores above 730) have never borrowed as formal enterprises. Nationally, 3.9 crore individual business borrowers have never accessed formal enterprise credit, despite 63% maintaining CIBIL Scores above 730 and 54% possessing at least two years of business borrowing experience.

Leadership Perspectives on Market Evolution:
Ejaz Nazeer, Chief Product Officer at TransUnion CIBIL, emphasized that strengthening the progression from individual borrowing to enterprise-level credit allows lenders to assess business cash flows and provide evolving financial solutions that support sustainable expansion. Complementing this, Shri Suresh Babu, Zonal General Manager (South Zone) at NSIC, highlighted the presence of a sizeable ‘missing middle’ led by traders and manufacturers, reaffirming NSIC’s commitment to working alongside lenders and partners like TransUnion CIBIL to help small enterprises formalize, access working capital, and reduce reliance on personal assets as collateral.