tl;dr
In India, landless tenant farmers in Andhra Pradesh and Odisha are benefiting from a pilot program using the central bank digital currency (CBDC), the digital rupee, to access agricultural loans through the State Bank of India and NABARD. The initiative provides Kisan Credit Card loans directly to t...
Landless tenant farmers in India’s Andhra Pradesh and Odisha are gaining new advantages through pilot projects leveraging the central bank digital currency (CBDC), specifically the digital rupee, to enhance access to agricultural loans and subsidies.
The initiative, led by the State Bank of India (SBI) in partnership with the National Bank for Agriculture and Rural Development (NABARD), is facilitating Kisan Credit Card (KCC) loans directly to tenant farmers—those who cultivate land without ownership rights. This innovative approach uses digital wallets and CBDC to disburse funds securely, ensuring money is spent exclusively on farming inputs like seeds and fertilizers from authorized vendors, thereby minimizing misuse.
Since the program's inception, more than ₹4.5 crore has been sanctioned in fiscal year 2025, benefiting hundreds of tenant farmers: 501 in Odisha and 218 in Andhra Pradesh. This is significant, considering that approximately 30-40% of cultivated land in India is farmed by tenant farmers, who traditionally face hurdles obtaining formal loans due to lack of land titles and proper documentation.
The pilot addresses these credit access challenges by offering KCC loans at subsidized interest rates under the Modified Interest Subvention Scheme (MISS)—allowing borrowing up to ₹3 lakh at 7% annual interest, with timely repayment discounts reducing the effective rate to 4%. From FY2026, the borrowing limit is set to rise to ₹5 lakh. These loans support essential agricultural expenditures, including allied sectors like dairy and fisheries.
The program exemplifies how digital currency integration can transform rural finance through transparent, traceable, and efficient credit delivery, making financial inclusion a reality for marginalized cultivators. Furthermore, the Reserve Bank of India’s ongoing digital rupee pilots, which started in 2022, have progressed substantially, with retail digital wallet transactions developing steadily and broad adoption prospects improving.
Experts, including former RBI Governor Shaktikanta Das, view the digital rupee as a key player in India’s monetary future, highlighting CBDC’s growing role in reshaping payment systems and financial services across sectors like agriculture that form the backbone of the country’s economy.