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All you need to know about the " Kisan Credit Scheme"

Under this scheme, farmers are provided loans ranging from 50,000 to 30,0000. This scheme is also called PM Kisan Credit Card Scheme.

Posted by Priya Singh on 10-Feb-2023 12:26 PM



The Kisan Credit Scheme (KCC) was launched in 1998 and was based on a model scheme developed by the National Bank for Agriculture and Rural Development (NABARD). The scheme was created to help farmers meet their various credit needs in the agriculture sector by providing financial assistance.


This article will provide you with all the details of the Kisan Credit Card Scheme

A Summary of the Kisan Credit Card Scheme

The Kisan Credit Card scheme was created with the goal of making it easier for farmers to obtain adequate and timely credit. This would assist farmers in purchasing agricultural inputs such as seeds, fertilizers, pesticides, and so on.

Under this scheme, farmers are provided loans ranging from 50,000 to 30,0000. This scheme is also called PM Kisan Credit Card Scheme. The rate of interest on this is 4% for 6 months and 7% for 1 year. This agricultural loan is given for 5 years. This loan is given to the farmers by the government through regional rural banks or other government banks, the farmers use the loan to meet the expenses of farming, fertilizers, sowing, seeds and crop insurance. Kisan Credit Card was started to save farmers from this problem. Farmers can also get crop insurance with this card. If the crop has been destroyed for any reason, then they are also given compensation. For example, the farmer’s credit card is very useful in these problems such as crop burning due to drought or crop submergence due to floods.

The KCC Scheme's Benefits and Eligibility Criteria

The following are the features of the Kisan Credit Card Scheme:

  • Farmers' financial needs, as well as any expenses incurred during the post-harvest season, will be met.
  • Farmers who qualify for the KCC scheme will be given a savings account with low-interest rates.
  • The KCC scheme will allow for a simple disbursement procedure and flexible loan repayment options.
  • For loans of up to Rs. 1.6 lakh, no collateral is required.
  • Credit cards will be available for three years.
  • The eligibility for these subsidies is determined by the cardholder's repayment history and overall credit history.
  • Fees and other charges, such as processing fees and land mortgage deed charges, would be determined by the issuing bank.
  • The limit will be set based on operational land holding, cropping patterns, and financial scale.
  • The Card has a 5-year validity period after which it will be subject to an annual review. In the event of a good credit score, the card limit would be increased.
  • Loan rescheduling and conversions will be permitted in the event of crop damage caused by an unforeseen event such as a natural calamity, etc.

The Kisan Credit Card Scheme has the following eligibility criteria:

  • Individual farmers who own and cultivate their land
  • Tenant farmers
  • Farmers engaged in crop production or activities such as animal husbandry
  • Fishermen, SHGs, JLGs, and women's groups
  • Fishermen who own a registered boat or another type of fishing vessel and have the necessary licenses or permits to fish in estuaries or at sea.
  • Poultry farmers, as well as those who raise sheep, rabbits, goats, pigs, and so on.
  • Farmers, dairy farmers

What are the benefits of the Kisan Credit Scheme?

Some of the benefits of the Kisan Credit Scheme are as follows:

  • Procedures for disbursement are simplified.
  • Removes cash and kind constraints.
  • There is no need to apply for a loan for each crop.
  • Guaranteed credit availability at any time, resulting in a lower interest burden for the farmer.
  • Aids farmers in purchasing seeds and fertilizers at their leisure and discretion.

How long will it take to repay a loan obtained through the KCC?

The term loan component is normally repayable within 5 years, depending on the type of activity/investment and the existing investment credit guidelines.

How many Kisan Credit Card Schemes are there?

According to the Finance Ministry, as of January 8, 2021, approximately 1.8 Kisan Credit Cards with a credit limit of Rs 1.68 lakh crore have been sanctioned.

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