Bengaluru, Feb 27 (PTI) NABARD on Thursday projected a priority sector credit potential of Rs 4.99 lakh crore for Karnataka for the financial year 2026-27, registering a 12 per cent increase over the projections made for the previous fiscal.

Releasing its "State Focus Paper for FY 2026-27" at the State Credit Seminar in Bengaluru, the National Bank for Agriculture and Rural Development assessed the exploitable credit potential under priority sectors in the State at Rs 4,99,530.93 crore for the coming financial year.

The projections are aimed at guiding banks and financial institutions in formulating their Annual Credit Plans.

According to NABARD, agriculture and allied sectors account for 45 per cent of the total projected credit potential. Farm credit alone includes Rs 1,90,397.40 crore towards crop loans for agriculture and allied activities and Rs 47,166.71 crore towards term loans. Credit potential for ancillary activities has been estimated at Rs 28,876.81 crore.

The MSME sector has been assigned a credit potential of Rs 2,14,501 crore, constituting 42 per cent of the overall projection. Other priority sector segments include housing at Rs 28,119.01 crore, education at Rs 5,650.12 crore, export credit at Rs 5,983 crore, social infrastructure at Rs 1,936.91 crore and renewable energy at Rs 1,802.14 crore.

Agri infrastructure has been projected at Rs 81,485 crore.

NABARD stated that the enhanced projection reflects the growing credit absorption capacity across sectors and the need to strengthen rural infrastructure, agriculture resilience and enterprise development in the State.

The bank noted that the State Focus Paper is prepared through a consultative process involving banks, government departments and other stakeholders, and serves as a base document for district-level credit planning.

It added that the projections are aligned with sectoral priorities, infrastructure requirements and policy support needed to sustain inclusive and balanced growth across Karnataka. PTI GMS SA

Priority sector credit projections guide bank annual plans, prioritising agriculture, MSME lending and rural infrastructure financing. Projection of priority sector credit potential quantifies exploitable lending needs across agriculture, MSME and other priority segments for the State, with agriculture accounting for the largest share and MSME receiving substantial allocation. Component estimates include crop and term loans, ancillary activities, housing, education, export credit, social infrastructure, renewable energy and agri infrastructure. The assessment is a consultative planning tool to guide banks' Annual Credit Plans and district credit strategies, signalling increased credit absorption capacity and alignment with sectoral priorities and infrastructure requirements to support rural resilience and enterprise development.