Agricultural credit flow remains uneven across regions

Farming Funds Face Regional Drift

- SANDIP DAS

DESPITE THE DOUBLE-digit annual growth in agricultural credit flow in the last decade, the regional distribution of credit continues to be skewed with southern states receiving 48% of more than ₹28 lakh crore loans disbursed by banks in 2024-25.

Last fiscal, agri-credit disbursal to Tamil Nadu was highest at ₹4.75 lakh crore (16% of disbursal in the country), followed by Andhra Pradesh at ₹3.27 lakh crore or 11% of the country's total farm loans. All the southern states received ₹13.8 lakh crore as agri-credit in FY25, according to the latest provisional data.

The five southern states have a share of around 17% of the gross cropped area of the country.

In FY25, National Bank for Agriculture and Rural Development (NABARD) had disbursed over ₹28.69 lakh crore through commercial banks, cooperatives and regional rural banks. The share of commercial banks in disbursal of credit to the farm sector was ₹23.22 lakh crore or over 80% of the agri-loans.

The farm credit flow to North-eastern states by commercial banks, regional rural banks and cooperative banks was only ₹25,486 crore in 2024-25, about 1% of the total credit disbursement.