Role of NABARD in Strengthening Rural Credit Delivery and Financial Inclusion in India: a Post-Liberalization Analysis
Author(s): Dr. Mrityunjai Singh
Publication #: 2604017
Date of Publication: 07.12.2021
Country: India
Pages: 1-16
Published In: Volume 7 Issue 6 December-2021
DOI: https://doi.org/10.62970/IJIRCT.v7.i6.2604017
Abstract
A critical look at the National Bank for Agriculture and Rural Development (NABARD) and its role in the development of rural credit delivery and financial inclusion in post-liberalization India, with particular emphasis on the post-2014 digital transformation phase. Despite the massive growth in institutional credit following the 1991 financial reforms, structural inequalities, rooted in social hierarchies, institutional weaknesses, and regional disparities, remain in place that prevent equitable access to formal finance. Based on Financial Intermediation Theory and Institutional Theory, the paper posits NABARD as both a systemic intermediary to reduce market friction and an institutional architect that develops governance, norms, and capacities in rural financial systems. NABARD is analysed in three stages: (i) the SHG-driven social intermediation phase (1991-2005), (ii) the institutional consolidation phase of cooperative and RRB reforms (2005-2014), and (iii) the digital integration phase (fintech adoption, PACS digitization, and e-Shakti). However, while NABARD has significantly developed the framework of financial inclusion, its outcomes have been uneven, with last-mile exclusion, regional imbalances, and ever-growing digital divides keeping the quality of the outcomes very uneven. Also, the research underscores the growing importance of climate-resilient finance as a new frontier in rural development policy. NABARD has made a transition from supply-based credit delivery to ecosystem-based inclusion, but meaningful financial inclusion must be based on less access and more context-based, resilience-driven development frameworks to make it possible.
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