Even as credit growth to MSME segment has improved, default rates among borrowers taking multiple loans from MSME lenders have risen, a report said. The commercial credit growth recovery continues at 13.5 per cent on-year growth in the September 2018 quarter and total on-balance sheet credit exposure in India stood at Rs 105.5 lakh crores as of same quarter, a report by TransUnion CIBIL-SIDBI MSME Pulse said. MSME credit accounts for Rs 24.7 lakh crores, including credit to MSME entities and credit to individuals for business purposes, of this amount. The default rates in borrowers availing multiple loans from multiple Micro, Small and Medium Enterprise (MSME) lenders within a period of 60 days have increased to 4.4 percent from 2.5 percent during September 2015 to September 2018 period, a report also noted. The pattern is mainly visible on loans disbursed by NBFCs, the report added. Also read: Share market LIVE updates: Sensex holds gains, Nifty below 10,850; Infosys, Axis Bank shares surge \u201cThis implies that stacked loans by borrowers have a higher potential of turning into NPAs\u201d, the report noted. The report also said that 45 per cent of the sanctions showing loan stacking behaviour belong to loans sanctioned by NBFCs and 23 per cent of the borrowers who have taken loans from NBFCs fall in this category. \u201cThe risk of default on loans taken by borrowers who have stacked their loans has increased in the last 3 years and therefore lenders must establish prudent processes and policies to detect and mitigate risks arising from loan stacking behaviour\u201d, Satish Pillai, Managing Director and CEO of TransUnion CIBIL said. A marginal improvement in the bad loans among MSME sector in the year to September 2018 has been observed, the report said. The NPAs for both banks and NBFCs from the 'micro' enterprises segment have improved to 8.5 per cent in September 2018 from the 8.7 per cent last year.