The Kisan Credit Card (KCC) scheme has been launched by the Government of India which aims to provide easy credit to farmers for their agricultural needs. The scheme is designed to provide timely and affordable financial support for various agricultural activities including purchase of seeds, fertilizers, pesticides and other working capital needs like irrigation and equipment.
It also provides credit for post-harvest expenses and marketing expenses.
KCC is extended by banks and the loan amount also varies depending on the type of agricultural activity and the land holding of the farmer. This scheme offers low-interest loans with flexible repayment options. It ensures that farmers can manage their cash flow effectively. It also includes insurance coverage to protect against crop loss or natural calamities. KCC has played an important role in increasing economic inclusion in rural areas, empowering farmers and increasing agricultural productivity in India.
Charges and Procedures for Kisan Credit Card Loans
After the discussions in the Lok Sabha on the farmers’ schemes, the Government of India has also clarified on various issues like KCC. Also, here is what farmers need to know about the fees, interest rates and enrollment requirements under the scheme.
There is no fee for loans up to Rs 3 lakh
Under the Kisan Credit Card (KCC) scheme, farmers can avail loans of up to Rs 3 lakh without any charges. This provision aims to make credit more accessible to small and micro farmers by reducing their financial burden. The government provides interest subsidies on these loans, which ensures that the cost of borrowing remains low. Additionally, loans are provided at discounted interest rates and repayment terms are flexible, with an option to repay after harvest. The initiative is part of the government’s efforts to promote financial inclusion in rural areas, support agricultural activities and reduce dependence on informal, high-interest lending sources. Waiver of fees on loans up to Rs 3 lakh will encourage more farmers to take advantage of the scheme and help them get the necessary funds for their farming operations.
Pankaj Chaudhary, Minister of State in the Ministry of Finance, responded to a query regarding the interest rate for Kisan credit cards on monthly, half-yearly or annual basis, saying that under the KCC scheme, 7% per annum discounted interest rate of Rs 3 lakh. available Also, farmers who repay their loans promptly can avail an interest rebate of 3%. Effectively the annual interest rate can be reduced to 4%. For loans above 3 lakhs, the interest rates are determined as per the respective bank’s policy.
After submitting the application, the bank will verify the details and assess the loan eligibility of the farmer. After successful verification, the KCC is approved and the loan amount is disbursed directly to the farmer’s bank account. Many banks offer the facility of applying through mobile banking applications, which provides further ease of access to farmers.