IGI Logo

The National Bank for Agriculture and Rural Development (NABARD) is developing artificial intelligence (AI) models around on-demand Kisan Credit loans as India's rural finance ecosystem increasingly embraces digital lending, Chairman Shaji Krishnan V said on Thursday. 

Speaking on the second day of the Global Fintech Fest 2026 here, Krishnan said digitalisation is gaining traction across agriculture and allied sectors, including fisheries and dairy, creating new opportunities to improve credit delivery and financial inclusion in rural India.

He said rural financial institutions are increasingly participating in digital lending processes to ensure farmers and rural households receive credit in a timely manner.

According to Krishnan, the government's efforts in creating foundational digital infrastructure have laid the groundwork for bridging the rural urban divide. 

He noted that nearly 45 per cent of India's population lives in rural areas, making inclusive growth critical for the country's development.

"When India has to grow very fast, every section of society needs to grow," he said and added that the next step is to better link identity frameworks such as Aadhaar with economic activity.

Krishnan highlighted the role of the Agri Stack, which comprises identification, land and crop layers in building a digital foundation for the sector. 

He said the creation of Agri Stack necessitated an additional financing layer to ensure financial products are available at the right time and place.

He also pointed to growing digitisation in sectors such as horticulture, fisheries and dairy. 

While climate resilience and traceability are becoming increasingly important in horticulture, traceability is also emerging as a key requirement in fisheries, he said.

Meanwhile, he noted that challenges remain in rural finance, including gaps in credit enhancement, credit guarantees and insurance.

India continues to face an agricultural credit gap of about Rs 1.3 lakh crore, he said.

Krishnan added that agricultural loan portfolios inherently carry higher risks because of their dependence on factors beyond borrowers' control. However, he noted that farm-sector non-performing assets have declined over time and there remains scope for further improvement.