The past two years have been challenging for rural markets, but recent quarters have shown signs of recovery and we expect stabilisation in FY27 despite the El Nino impact, a senior executive of rural-focused NBFC Dvara KGFS said.
The India Meteorological Department’s monsoon outlook has tempered some optimism and the agrarian economy is also linked closely to petrochemicals, but we are “cautiously bullish” about growth in the coming fiscal year given the trend in the last six months, Rahul Tripathy, CPO, Dvara KGFS, said in an interaction with businessline.
The executive says early estimates suggest a 20–25 per cent business expansion for the mid-tier NBFC in FY27, compared to almost flat growth in FY26. As of March 31, Dvara KGFS’s AUM stood at ₹1,921 crore, close to the ₹2,000-crore mark.
While El Nino in general is associated with cash flow disruptions, a change in borrowing behaviour and credit stress in rural portfolios, Tripathy also sees a silver lining. “Delays in rainfall could offer some breathing room for agricultural supply chains, especially amid concerns over fertiliser disruptions linked to the ongoing Iran conflict,” he said.
The company, whose core thesis is to promote the financial well-being of customers in rural India, said its business model has evolved from being predominantly household-centric to also serving rural enterprises. Over the last few years, enterprise loans have grown to make up around 45 per cent of the portfolio, with household lending making up the remaining. Dvara KGFS recently launched cattle insurance products and is also working on shopkeeper insurance and parametric insurance solutions.
Interestingly, climate change is at the top of the NBFC’s mind as a rural-focused lender. Tripathy says the lender is currently undertaking comprehensive climate risk assessment of its entire portfolio, despite not being mandated under the Reserve Bank of India’s current climate risk compliance framework, which applies to larger, upper-layer NBFCs.
“Our investors and lenders are supporting us through this transition,” he said, adding that the climate-finance framework is now a key guide to its product development and distribution strategy.
On the new products front, gold loans and other secured micro loans are emerging as key focus areas. Dvara KGFS currently operates around 130 branches offering gold loan products, and plans to scale this segment further in the coming year.
With regard to the capitalisation of the NBFC to meet its growth targets, Tripathy says they are constantly evaluating funding relationships and remain in talks for both debt and equity funding. But we are well capitalised at the moment, he adds.
Published on April 23, 2026