NABARD sees strong farm credit demand in FY27 as input costs and agri investment rise
NABARD expects agricultural and rural credit demand in India to stay resilient in 2026-27 as higher input costs, wider KCC coverage and investment in mechanisation and infrastructure keep borrowing needs elevated.
India’s National Bank for Agriculture and Rural Development, NABARD, expects agricultural and rural credit demand to remain resilient in the 2026-27 financial year. Deputy Managing Director Ajay Kumar Sood said the main supports will be higher input costs, wider Kisan Credit Card coverage and stronger investment in allied activities, mechanisation and agricultural infrastructure.
Sood said farm credit demand in India has expanded sharply over the past decade. He compared agricultural credit disbursement of about Rs 8.5 lakh crore in 2014-15 with a provisional figure of roughly Rs 30 lakh crore in 2025-26. Even if growth slows from the pace seen in earlier years, that comparison shows how central formal credit has become to farming and the wider rural economy.
Looking ahead to 2026-27, Sood said demand should continue to improve, though at a steadier pace. He linked that outlook directly to more expensive farm inputs, broader use of Kisan Credit Cards and greater credit absorption in mechanisation, infrastructure and allied segments. In practical terms, that means borrowing demand is being sustained not only by seasonal crop needs but also by investments that can change the productive capacity of farms and rural businesses.
He also pointed to a gradual change in the composition of agricultural lending. According to Sood, the structure is moving toward a larger role for long-term investment credit rather than relying mainly on short-term crop loans. That matters because it signals a shift from credit used primarily for one production cycle toward credit used for machinery, infrastructure and other longer-horizon productivity improvements.
At the same time, the outlook is not without pressure points. The article synopsis notes that higher borrowing costs remain a challenge for farmers and rural MSMEs. In other words, demand is being supported by real working-capital and investment needs, but the durability of that growth will depend on how borrowers manage more expensive finance while operating in an environment of rising agricultural costs.