Mumbai, September 10 (Daily Kiran) : The National Bank for Agriculture and Rural Development (NABARD) is taking significant steps to modernize rural financial services. Chairman Shaji Krishnan V announced on September 10 that the bank is developing an artificial intelligence (AI)-based model to provide on-demand farmer credit loans. This initiative aims to ensure timely access to loans for farmers and rural families, making the rural financial system more digital and effective.
Speaking at the second day of the Global Fintech Fest 2026 in Mumbai, Krishnan highlighted the rapid digitization occurring in agriculture, fisheries, dairy, and related sectors. He noted this shift is creating new opportunities to strengthen loan distribution and enhance financial inclusion in rural areas.
Krishnan pointed out that rural financial institutions are increasingly participating in digital lending processes, enabling easier access to financial assistance for farmers when needed. He emphasized that the digital public infrastructure developed by the central government has laid a strong foundation for bridging the gap between rural and urban India. With approximately 45% of India’s population residing in rural areas, inclusive growth is crucial for the country’s rapid economic advancement. “For India to progress swiftly, development across all segments of society is essential,” he stated.
The NABARD chairman also discussed the need to better integrate identification systems like Aadhaar with economic activities to facilitate easier access to financial services for farmers and rural citizens. He mentioned the development of an Agri Stack, which includes identity data, land records, and crop-related information, providing a robust digital foundation for the agricultural sector.
Krishnan stressed the necessity of a strong financial framework alongside the Agri Stack to ensure that appropriate financial products are available to farmers at the right time and place. He noted that digitization is also accelerating in sectors like horticulture, fisheries, and dairy. In horticulture, climate adaptability and product traceability are becoming increasingly important, while traceability is also emerging as a key requirement in the fisheries sector.
Despite these advancements, Krishnan acknowledged several challenges facing the rural finance sector, including deficiencies in loan enhancement systems, loan guarantees, and insurance coverage. He revealed that a significant credit gap of approximately ₹1.3 lakh crore still exists in the agricultural sector, which needs to be addressed.
He also pointed out that agricultural loans inherently carry higher risks, as their repayment depends not only on the borrower’s ability but also on external factors like weather, production, natural disasters, and market conditions. However, he noted that there has been a reduction in the non-performing asset (NPA) levels in the agricultural sector in recent years, with ample room for further improvement.
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