Weak Monsoon Threatens Farm Incomes and Rural Loan Repayments in India
Weak Monsoon Threatens Farm Incomes and Rural Loan Repayments in India
IN · Published Nov 2, 2026
• India's weak southwest monsoon, which recorded only 87% of the long-period average rainfall, is raising concerns about rural incomes and loan repayments.
• According to a report by Nomura, the deficient rainfall has adversely affected agricultural productivity, putting farm incomes at risk.

Impact & Risks

The weak monsoon has led to reduced agricultural output, impacting the income of farmers and rural workers. This has raised concerns about the ability of rural households to repay loans, particularly those taken from NBFCs for farming, vehicle purchases, and consumption. Urban salaried households are also feeling the pinch due to rising food inflation, which is reducing disposable income and increasing financial stress. The situation could lead to higher credit costs and slower lending growth for financial institutions.

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