Despite the double-digit annual growth in agricultural credit flow in the last decade, the regional distribution of credit continues to be skewed with  southern states receiving 48% of more than Rs 28 lakh crore loans disbursed by banks in 2024-25.

Last fiscal, agri-credit disbursal to Tamil Nadu was highest at Rs 4.75 lakh crore, (16% of disbursal in the country), followed by Andhra Pradesh at Rs 3.27 lakh crore or 11% of the country’s total farm loans. All the southern states received Rs 13.8 lakh crore as agri-credit in FY25, , according to the latest provisional data.
In FY25, National Bank for Agriculture and Rural Development (NABARD) had disbursed over Rs 28.69 lakh crore through commercial banks, cooperatives and regional rural banks. The share of commercial banks in disbursal of credit to the farm sector was Rs 23.22 lakh crore or over 80% of the agri-loans.

The farm credit flow to North-eastern states by commercial banks, regional rural banks and cooperative banks was only Rs 25,486 crore in 2024-25, about 1% of the total credit disbursement.

Other regions – north (14.9%), east (8.2%), central (13.7%) and west (14%) have a smaller share in the total agri loans disbursed. In terms of gross cropped area of the country these regions – north (20%), east (12%), central (28%) and western (17%) have much larger areas.

According to an analysis by NABARD, which provides refinance facilities to banks, the regional disparity in credit flow can be attributed to factors including weak rural financial institutional infrastructure and lower credit absorption due to low level financial literacy across states.