India’s agricultural sector, home to over 120 million small and marginal farmers, has long faced significant credit access barriers. While formal agricultural credit crossed Rs 34 trillion in FY21–22, the reality on the ground tells a different story—millions of farmers continue to rely on informal lending sources such as local moneylenders and input traders.
These sources, though accessible, often come with high interest rates and exploitative terms. The problem is not the demand for credit, but rather the lack of discoverable, accessible, and tailored financial solutions that align with the realities of rural India.
This is where digital agri-lending is emerging as a transformative force. Enabled by technology and driven by FinTech innovation, digital platforms are addressing the very pain points that have long excluded smallholder farmers from formal finance. One of the most promising developments is the use of alternative data, such as satellite imagery, weather patterns, land records, and transaction behavior to assess creditworthiness. This allows lenders to go beyond traditional collateral and income proofs, opening the door to inclusive, customised loan products.
In recent years, innovative financial institutions have been transforming agri-lending by leveraging satellite imagery and farm-level data to improve credit assessments. These tech-driven models enable faster, paperless disbursements, even in the most remote parts of rural India, where traditional documentation and credit history are often unavailable.
Digital platforms are also evolving into one-stop agri-finance ecosystems, combining access to credit with input supplies, weather insights, and advisory services. With vernacular support, intuitive interfaces, and real-time eligibility checks, these tools are not only simplifying the borrowing journey but also building trust among first-time and underserved borrowers.
NBFCs are at the forefront of this shift. Agile, adaptive, and customer-centric, they are addressing critical credit gaps through tailored lending products. By deploying alternative credit models and data-led risk assessment, NBFCs are extending formal finance to small business owners, gig workers, farmers, and other semi-formal earners—segments often left behind by traditional banks.
As a result, NBFCs are not just lending—they’re enabling entrepreneurship, stabilizing incomes, and laying the foundation for inclusive, resilient rural economies.
NBFCs have emerged as vital enablers of financial inclusion in India. By offering nimble, customised, and tech-enabled credit solutions, they are reaching borrower segments that have traditionally remained underserved by formal banks, such as small businesses, gig workers, and rural households. Their ability to innovate underwriting methods using alternative data has unlocked credit access for those with limited financial history, helping fuel entrepreneurship and grassroots growth.
The potential of embedded finance is also being explored across agricultural supply chains. Startups are enabling farmers to access working capital via agribusiness networks, with repayments linked to produce sales. This embedded model offers contextual, need-based financing while minimizing the risk of over-indebtedness. Additionally, warehouse receipt financing, as pioneered by players like StarAgri, is helping farmers convert stored produce into collateral, supported by geo-tagging and digital records.
Policy is also playing a crucial role in shaping the future of agri lending. The RBI’s upcoming Unified Lending Interface (ULI) will act as a backbone for digital credit delivery, integrating KYC, land records, and transaction data to create seamless, consent-based loan processing. Similarly, the approval of voluntary gold pledging up to Rs 10 lakh is helping rural households unlock liquidity through their household assets—an especially relevant step for agricultural communities.
Yet, while technology is solving for scale and speed, it must also solve for trust and transparency. Digital interfaces must be inclusive, intuitive, and culturally relevant. Many farmers are first-generation borrowers navigating digital tools for the first time. Providing voice-enabled platforms, clear repayment terms, and grievance redressal mechanisms is not just a feature, it’s a necessity.
Ultimately, digital agri lending is more than just an efficiency upgrade—it’s a chance to reset the rural credit ecosystem with empathy and intelligence. By combining smart technology, policy frameworks like Agri Stack, and human-centered design, we have the opportunity to bridge India’s rural credit divide in a way that is scalable, ethical, and impactful.
The farmer doesn’t just need a loan, needs dignity, clarity, and a system that sees him not as a risk, but as potential.
– Sumit Sharma, Founder, Radian Finserv
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