Farmers borrowing more from banks and are creditworthy, too

Bad loans from agricultural lending have decreased by 2-4 percentage points across bank groups between FY20 and FY24. This is despite farmers increasingly borrowing from the formal sector.

Outstanding agricultural loans rose faster than corporate loans at an average rate of 15.2% after the Covid period compared to a contraction or a singledigit annual growth in corporate loans during the pandemic.

The number of farmers’ accounts opting for credit through institutional sources increased by 381 lakh from March 2020 to March 2024. A large number of urban labourers moved back to their rural homes post Covid, Covid, fostering growth in agricultural activities.


According to the finance ministry’s replies to questions raised in the Lok Sabha, decreasing nonperforming assets during this period indicates an improvement in farmers’ repaying capacity.

The various schemes/programmes of the Union Government, such as Kisan Credit Card, PM KISAN, and PMFBY, are designed to increase the welfare of farmers by increasing production, remunerative returns and income support to farmers.

Under the PM KISAN scheme, income support of Rs 6,000 per year in three equal instalments will be provided to all land-holding farmer families. The Pradhan Mantri Fasal Bima Yojana (PMFBY) is a government-sponsored crop insurance scheme integrating multiple stakeholders on a single platform.