In India, scheduled commercial banks (79%) are the major players in supplying credit to agriculture sector followed by rural cooperative banks (15%), regional rural banks (5%) and micro finance institutions (1%). Small finance banks set up with the objective of deepening financial inclusion have started their operations recently.
They would be catering to small and marginal farmers, low income households, small businesses and other unorganised entities. Challenges in agriculture financing 10. Despite the impressive growth in formal agricultural credit, there are still several challenges that need to be tackled.