News | NABARD’s New Credit Model Aims to Transform Rural India’s Agri Economy

NABARD’s New Credit Model Aims to Transform Rural India’s Agri Economy

News

18 June 2025

2 min read

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In a decisive move to reshape rural credit delivery in India, the National Bank for Agriculture and Rural Development (NABARD) is advocating for a transition from conventional production-based lending to more holistic, market-linked financing models. This renewed approach focuses on strengthening agricultural value chains, empowering Farmer Producer Organisations (FPOs), and enhancing last-mile access to credit.

Speaking at a high-level meeting of state cooperative banks, regional rural banks, and other key financial institutions, NABARD Deputy Managing Director Ajay Kumar Sood emphasized the need for value chain financing to replace fragmented, input-based credit models. He noted that rural lending must now align with real market outcomes and create sustainable economic pathways for farmers and rural entrepreneurs.

In line with this strategy, NABARD highlighted the importance of leveraging institutions like LAMPS (Large Area Multi-Purpose Societies) and PACS (Primary Agricultural Credit Societies) to serve as efficient credit channels in underserved rural pockets. The institution also reiterated its commitment to bolstering the digital infrastructure supporting rural finance, including the wider rollout of interest subvention portals and technology-backed credit monitoring.

Adding further momentum to its regenerative agriculture efforts, NABARD announced the launch of three new JIVA projects in Jharkhand. These projects aim to promote natural farming practices among tribal communities, blending environmental stewardship with livelihood resilience.

NABARD’s evolving approach signals a shift in how rural development is financed in India—moving from isolated credit products to ecosystem-level solutions that integrate access to finance, technology, and markets. With this vision, the organization aims to create a more inclusive, future-ready rural economy that benefits smallholders and agripreneurs alike.