Kisan Credit Card Scheme: Empowering Farmers with Access to Credit
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As India’s agrarian economy continues to be a significant contributor to the nation’s GDP, the government of India has implemented numerous policies to enhance the livelihoods of farmers across the country. One such initiative is the Kisan Credit Card Scheme (KCC), which aims to provide financial assistance to farmers to meet their agricultural needs. This article explores the various aspects of the KCC scheme, including its history, eligibility criteria, benefits, and challenges.
History of the Kisan Credit Card Scheme
The Kisan Credit Card Scheme was launched in August 1998 by the Reserve Bank of India (RBI) and the National Bank for Agriculture and Rural Development (NABARD) to provide affordable credit to farmers. The primary objective of the scheme was to ensure timely access to credit to meet the short-term credit requirements for cultivation of crops, post-harvest expenses, and other agricultural activities. Initially, the scheme was implemented on a pilot basis in a few states, and its success led to its nationwide implementation in 1999.
Eligibility Criteria for the KCC Scheme
The KCC scheme is available to all farmers, including individuals, joint cultivators, and tenant farmers, who are engaged in agricultural activities. The eligibility criteria for availing of a KCC include:
- The farmer should have a record of cultivable land in his/her name or should be a joint owner of the cultivable land.
- The farmer should be a resident of the area where the bank branch is located.
- The farmer should not be a defaulter to any bank or financial institution.
- The farmer should have a satisfactory credit history.
- The farmer should provide proof of identity and address, such as a voter ID card, Aadhaar card, or passport.
Benefits of the KCC Scheme
The KCC scheme offers numerous benefits to farmers, such as:
- Access to timely credit: The KCC scheme provides farmers with timely credit to meet their agricultural needs. This helps farmers to ensure timely cultivation, which, in turn, increases their productivity and profitability.
- Flexible credit: The KCC scheme offers flexible credit to farmers based on their credit requirements. Farmers can use the credit for various purposes, such as purchasing seeds, fertilizers, pesticides, and other inputs.
- Affordable credit: The KCC scheme offers affordable credit to farmers, with interest rates ranging from 7% to 9%, depending on the bank’s policies.
- Credit based on the cropping pattern: The KCC scheme offers credit to farmers based on their cropping pattern. The credit limit is determined based on the farmer’s land holding, cropping pattern, and the scale of finance.
- Insurance coverage: The KCC scheme offers farmers insurance coverage against crop failures, natural calamities, and other risks.
Challenges faced by the KCC Scheme
Despite its numerous benefits, the KCC scheme faces several challenges, such as:
- Lack of awareness: Many farmers are unaware of the KCC scheme and its benefits. This results in a lower number of farmers availing the scheme.
- Limited coverage: The KCC scheme has limited coverage in terms of the number of farmers and the areas covered. This limits the scheme’s impact on farmers.
- Limited credit availability: Many farmers face a credit crunch due to limited credit availability under the KCC scheme. This limits their ability to invest in agricultural activities.
- Administrative issues: The KCC scheme faces administrative issues, such as delays in the disbursement of credit and bureaucratic procedures, which result in a lower number of farmers availing the scheme.
The Kisan Credit Card Scheme is an excellent initiative to provide financial assistance to farmers.
- Kisan Credit Card Scheme: Empowering Farmers with Financial Inclusion
- India, a predominantly agrarian country, has been striving to address the financial challenges faced by its farmers for decades.
- Despite being the backbone of the Indian economy, farmers often face difficulties in accessing credit, leading to a lack of resources for agricultural practices, leading to a decrease in crop yields, and a resultant decrease in income. Recognizing this issue, the Indian government introduced the Kisan Credit Card Scheme (KCC) in 1998, aimed at providing farmers with easy access to credit and other financial services.
- The KCC scheme is a government-backed initiative that offers credit facilities to farmers, enabling them to access institutional credit from various financial institutions. Farmers can use this credit to purchase agricultural inputs such as seeds, fertilizers, pesticides, and other necessary inputs, and also to meet their personal expenses.
- The scheme is implemented by all public sector banks, regional rural banks, and some cooperative banks in India.
- The primary objective of the KCC scheme is to provide timely and adequate credit support to farmers for their short-term credit needs.
- The scheme offers farmers a flexible credit facility, which can be used for multiple purposes, including crop production, post-harvest expenses, consumption needs, and more. It also provides farmers with interest subsidies, making credit accessible and affordable for them.
- To be eligible for the KCC scheme, farmers must be Indian citizens and have land in their name. The scheme is available for all farmers, including individuals, joint cultivators, owner-cum-cultivators, tenant farmers, sharecroppers, etc.
- Applicants must submit necessary documents such as land records, identity proofs, and other relevant documents. The credit limit offered under the scheme depends on the farmer’s landholding and their repayment capacity.
- The KCC scheme offers a unique and innovative financial product that provides farmers with a credit card, commonly referred to as the Kisan Credit Card, which they can use to withdraw money from ATMs or make purchases at various merchant establishments.
- The card is linked to the farmer’s bank account, and the credit limit is determined based on their landholding, cropping pattern, and other factors. The Kisan Credit Card offers farmers a convenient and hassle-free way to access credit, and it also serves as a tool for financial inclusion.
- The Kisan Credit Card has several advantages over traditional credit products. It is a revolving credit facility, which means that farmers can withdraw money multiple times up to the credit limit and repay the borrowed amount in installments.
- The card is also valid for up to five years, and farmers can renew it after that period. Moreover, the interest rate charged on the credit is lower than other credit products, making it affordable for farmers.
- Apart from credit facilities, the KCC scheme also provides farmers with various other benefits.
- These include insurance coverage for crops and other agricultural assets, and access to government subsidies and incentives.
- The insurance coverage provided under the scheme protects farmers from losses due to crop failure, natural calamities, or other unforeseen events. The subsidies and incentives provided by the government also help farmers reduce their costs and increase their income.
- The KCC scheme has been a game-changer for Indian agriculture, providing farmers with much-needed financial support and empowering them to make informed financial decisions.
- The scheme has been successful in achieving its objectives, and it has benefited millions of farmers across India. As of 2021, more than 68 million Kisan Credit Cards have been issued, with a total credit limit of over INR 8.5 lakh crore.
- Despite its success, the KCC scheme faces several challenges that need to be addressed. One of the major challenges is the low awareness among farmers regarding the scheme’s benefits and features. Many farmers are still not aware of
What is Kisan Credit Card scheme?
Who are eligible for Kisan Credit Card?
What is the benefit of Kisan Credit Card?
किसान क्रेडिट कार्ड योजना क्या है?
Apply for Kisan Credit Card Online in India – Crop Loan
- Facility Type: Revolving Cash Credit Account. Balance in the account, if any, will earn interest at the savings bank rate.
- Quantum of loan: Need based finance considering cropping pattern, area and scale of finance (SOF).
- Margin: Nil
- Moratorium: NA
- Repayment: Repayment period as per crop duration (short/long) and marketing period for the crop.
- Primary: Hypothecation of crops to be grown/assets to be created with bank finance.
- Collateral: Equitable mortgage / registered mortgage of land / immovable property applicable as 100% of the loan value. However, the collateral is waived for KCC limit up to Rs. 1.60 lakh in case of tie up arrangement and Rs. 3.00 lacs.
- Interest Subvention: 3% p.a. Interest subvention for instant borrowers up to Rs. 3.00 lacs.
- Tenure: 5 years, with 10% annual increase in the limit every year, subject to annual review.
- RuPay Debit Card for all eligible KCC borrowers.
- One. Eligible crops can be covered under Pradhan Mantri Fasal Bima Yojana (PMFBY) on premium payment.
- B. The borrower should opt for Personal Accident Insurance, Health Insurance (wherever applicable).
LOAN APPLICATION FORM FOR AGRICULTURAL CREDIT FOR PM-KISAN BENEFICIARIES
- What is the minimum and maximum loan under KCC?
- It is need based considering cropping pattern, acreage and Scale of Finance (SOF).
- Post-harvest expenses
- What are the credit components covered under KCC?
- Post-harvest expenses