Kisan Credit Card Scheme: Benefits, Eligibility, and Features

As part of the AazadiKaAmritMahostav celebration, the Union Cabinet Minister for Fisheries, Animal Husbandry, and Dairying, Shri Parshottam Rupala, launched the Nationwide AHDF KCC Campaign for 2023-24 on May 3, 2023. The objective of the campaign is to extend the Kisan Credit Card (KCC) facility to all small landless farmers engaged in animal husbandry and fisheries activities. Shri Parshottam Rupala will interact with beneficiaries of AHDF-KCC through CSC and the State Animal Husbandry Department during the launch.

Kisan Credit Card Scheme

• The Kisan Credit Card (KCC) Scheme is a government-initiated credit scheme for farmers in India.
• The Kisan Credit Card (KCC) Scheme was introduced in India in 1998 by the Reserve Bank of India (RBI) and the National Bank for Agriculture and Rural Development (NABARD) and is aimed at providing adequate and timely credit support to farmers to meet their agricultural needs.
• The KCC scheme enables farmers to purchase agricultural inputs such as seeds, fertilizers, pesticides, and other necessary items for agricultural operations at reasonable rates.
• The scheme provides affordable credit to farmers for both short-term and long-term requirements. The KCC scheme is implemented by various public and private sector banks, cooperative banks, and regional rural banks across the country.
• The credit limit for each farmer is determined based on the farmer’s cropping pattern, cultivation area, and other factors.
• The scheme has played a crucial role in providing financial assistance to farmers and boosting agricultural production in India.

Objectives of the Kisan Credit Card Scheme

• To provide timely and adequate credit support to farmers for their farming needs, including working capital for the maintenance of farm assets and post-harvest expenses
• To ensure the credit needs of farmers are met in a timely and hassle-free manner
• To provide flexibility to farmers in terms of repayment, i.e., they can repay the loan as per their cash flows
• To provide crop insurance to farmers to mitigate risks associated with crop failure and natural disasters
• To promote farmers’ access to other government schemes, such as soil health cards, neem-coated urea, etc.

Eligibility Criteria of the Kisan Credit Card Scheme

• Farmers, including tenant farmers, sharecroppers, oral lessees, self-help groups (SHGs), or joint liability groups (JLGs) of farmers, are eligible for the Kisan Credit Card scheme.
• The farmer must own or lease agricultural land.

Implementing Agency of the Kisan Credit Card Scheme

• The Kisan Credit Card scheme is implemented by various public and private sector banks, cooperative societies, and regional rural banks across India.
• The interest rate charged is determined in accordance with the guidelines framed by the Reserve Bank of India (RBI).

Loan Tenure of the Kisan Credit Card Scheme

• The loan tenure of the Kisan Credit Card Scheme varies depending on the type of crop produced or the agricultural activity undertaken by the farmer.
• Generally, the loan amount is valid for a maximum of 12 months.
• However, in some cases, the loan tenure can be extended up to five years, subject to annual renewals.
• Additionally, the repayment of the loan is structured to coincide with the harvesting and marketing of the crop, making it easier for farmers to repay the loan.
• The Kisan Credit Card Scheme also offers flexible repayment options, including short-term and long-term loans, to cater to the varying needs of farmers.

Features of the Kisan Credit Card Scheme

• The Kisan Credit Card (KCC) is a credit facility that provides farmers with short-term loans for their agricultural needs, as well as medium-term loans for investment purposes.
• The KCC scheme provides a flexible repayment option, and farmers can repay the loan when they have the resources to do so.
• Farmers can withdraw money from ATMs using the KCC, making it a convenient and hassle-free way to access credit.
• The Kisan Credit Card scheme includes an ATM-enabled RuPay debit card and allows for one-time documentation, built-in cost escalation in the limit, and unlimited withdrawals within the limit.
• The KCC scheme provides crop insurance to farmers, which helps mitigate risks associated with crop failure due to natural disasters or other reasons.
• The interest rate on the KCC loan is relatively low, making it an affordable credit option for farmers.
• KCC loans can be used for various agricultural purposes, including the purchase of inputs like seeds, fertilizers, pesticides, and machinery, as well as expenses related to post-harvest activities, like transportation, storage, and processing.
• The KCC scheme provides farmers with a single credit facility that meets all their agricultural credit needs, reducing the need to approach multiple lenders for different credit needs.
• The government has also made efforts to increase the saturation of KCC, including extending the scheme to farmers involved in animal husbandry and fisheries, waiving processing fees for KCC loans, and raising the collateral-free agriculture loan limit from Rs. 1 lakh to Rs. 1.6 lakh.

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