Locally available marginal soil has been widely used as backfills due to the non-availability of granular soil. The performance of MSE walls at the end of construction with marginal lateritic soil as backfill was studied by conducting numerical model studies. Two types of reinforcements, viz., conventional geogrids and hybrid geogrids, were used in the present study. Recent evidences of adverse impacts of climate change necessitate the need for adaptation of MSE walls to changing climate, especially when backfilled with marginal soils. A coupled flow-deformation analysis was conducted on MSE walls with geogrids (GW) and hybrid geogrids (HGW) as reinforcements. Considering the lack of the experimental data which quantify the hydraulic and mechanical response of marginal lateritic backfills during rainfall-induced wetting, a physical model test was also conducted and presented herein. Results show that the backfill suction in GW was lost at the end of 4 days of continuous heavy rainfall, but it was maintained in case of HGW even at the end of 10 days of rainfall infiltration. Rainfall infiltration increased the facing deformation and surface settlement by 37% and 97%, respectively, in the case of MSE wall reinforced with the conventional geogrids (GW). However, hybrid geogrids (HGW) delayed the progression of wetting front and have prevented the backfill to undergo deformation. In GW, reinforcement strain has reached a maximum of 2.1% at the end of 10 days of rainfall, whereas it was observed to be only 0.8% in case of HGW. Increment in reinforcement tensile load due to rainwater infiltration is 63% lower for HGW when compared with GW. Overall, the performance of MSE walls with marginal backfills was improved using hybrid geogrids due to the dissipation of excess pore water pressure.