Individual Entrepreneurs’ Credit Grows 22%, Reaches 28% of Commercial Balances: Equifax India
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According to Equifax’s Aspirational India – Business report, commercial borrowing by individual business owners grew at a 22% CAGR between FY23 and FY26, compared with 14% growth for traditional entity-level borrowing. Individual entrepreneurs now account for 28% of total commercial credit balances, putting them firmly at the centre of the country’s expanding formal credit ecosystem.
The shift comes as entrepreneurship spreads beyond established corporate centres and increasingly takes the form of smaller, founder-led businesses. India’s commercial lending ecosystem is consequently beginning to serve businesses not simply according to their legal structure, but according to their stage of growth, financial maturity and ability to generate cash flows.
Subhankar Mishra, Head of Business Strategy, Equifax India, said, “India’s entrepreneur is increasingly becoming a borrower in their own right, and that is changing the shape of commercial credit. As more businesses formalise and build digital financial footprints, lenders have an opportunity to assess the individual behind the enterprise alongside the business itself. The next phase of credit growth will be about matching the right capital to businesses at the right stage of their journey.”
Equifax’s analysis identifies five distinct commercial borrower profiles, ranging from established institutional businesses to first-time micro enterprises. At the other end of the spectrum from established businesses is the “Unorganized” or first-time micro borrower, typically an early-stage business of less than three years with a financial capacity of up to ₹25 lakh. For such businesses, lenders can increasingly use a combination of synthetic P&L statements, UPI or banking-account-statement data, digital footprints and the promoter’s bureau score to assess creditworthiness.
This is important because a large part of India’s potential commercial-credit market remains outside the formal lending system. Equifax estimates the country’s commercial business universe at 80–105 million enterprises, against just 40–50 million businesses currently served by formal commercial credit, leaving a potential gap of 40–55 million businesses.
The gap is particularly pronounced among businesses that are either preparing to enter formal credit or are seeking capital to expand. The “Emerging” segment alone has an estimated credit gap of 19–22 million businesses, while the “Growth Seeker” segment has another 12–15 million, creating a combined gap of 31–37 million potential borrowers.
The changing profile of borrowers is also reflected in the wider entrepreneurial ecosystem. Equifax’s report notes 8.9 crore+ Udyam and UAP registrations as of July 2026, representing 39.6 crore+ employment opportunities, while MSMEs contributed 31.1% of GDP and 45.73% of India’s exports in FY2023–24, according to the report.
For lenders, however, the challenge is not merely reaching these businesses but understanding them. The report highlights the growing role of GST, UPI and Account Aggregator infrastructure in enabling faster cash-flow verification, potentially allowing lenders to evaluate businesses through their operating activity rather than relying exclusively on conventional collateral or long-established financial records.
The data also suggests that access to larger pools of capital is closely tied to the maturity of a business’s credit history. Enterprises with more than five years of bureau history represent 39% of higher-value commercial exposure in the ₹10 lakh–₹2 crore segment, compared with 25% for those with up to two years of bureau history.
The result could be a commercial-credit market where the entrepreneur, rather than the corporate entity alone, becomes an increasingly important unit of underwriting. For millions of small businesses moving from informal activity to formal growth, the ability to establish a credible financial identity could become as important as the capital they seek.
