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16% of Agricultural Loan Turns Non-Performing Assets, says CIBIL Report

According to a TransUnion CIBIL analysis, around 16% of the agricultural loan has become non-performing assets (NPAs), and public sector banks account for 70% of farm credit.

Shruti Kandwal
According to the data on farm loans, launched by TU CIBIL, 16% of the agricultural loan has become non-performing assets
According to the data on farm loans, launched by TU CIBIL, 16% of the agricultural loan has become non-performing assets

According to the TU CIBIL "Insights" report, loans totaling Rs 7.6 lakh crore were disbursed for agricultural purposes in FY22. This covers loans made by commercial banks, financial companies, and alternative lenders such as rural banks and cooperatives. Banks in the public and private sectors make up 70% and 14%, respectively.

7.4 crore farmers in India are debtors

The report claims that there are 14.6 crore farmers in India, but only 7.4 crores of them are debtors. The working group on agricultural credit's report to the RBI lists some of the major issues as the accessibility of agricultural credit and regional inequality (credit not proportionate to their share in agricultural output).

While announcing a new solution in collaboration with data analytics provider SatSure, TU CIBIL disclosed statistics on farm loans. The CIBIL credit & farm report (CCFR) is created with the help of SatSure's geospatial data analytics.

As reported by a source, an official stated that the lack of a single, comprehensive source of information for evaluating credit risk and production risk is one of the major challenges to loan penetration in the agriculture industry. Lenders will have a complete picture of smart agricultural credit risk management and policy execution now that the CCFR is making modern credit insights, together with crop production and production risk parameters, available.

The CCFR uses government-published APIs and geospatial, remote sensing data to offer parameterized credit details, information about farm specifics and crop performance, ownership details, and other key regional variables. According to SatSure founder and CEO Prateep Basu, the digitization of agro loans will allow for quicker disbursements, lower evaluation costs, and a larger customer base.

About CIBIL

The CIBIL Commercial Report analyses the credit information of commercial borrowers to make sure their customers can make more informed lending decisions. These borrowers include, among others, proprietorships, partnership firms, public limited companies, and private limited companies.

A variety of information is available in the Commercial Credit Information Report, including risk scores, rich credit data sets focused on business needs, and more.

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