New Delhi [India], February 25 : The amount under operative Kisan Credit Card (KCC) accounts has more than doubled from Rs4.26 lakh crore in March 2014 to Rs10.05 lakh crore in December 2024.
According to the Ministry of Finance, this indicates significant increase in quantum of affordable working capital loans provided to the farmers for agriculture and allied activities. This is reflection of credit deepening in agriculture and reduced dependency on non-institutional credit.
Kisan Credit Card (KCC) is a banking product that provides farmers with timely and affordable credit for purchasing agricultural inputs such as seeds, fertilizers, and pesticides, as well as for meeting cash requirements related to crop production and allied activities.
In 2019, the KCC scheme was extended to cover the working capital requirements of allied activities, viz. Animal Husbandry, Dairy and Fisheries.
Government of India, under Modified Interest Subvention Scheme (MISS), provides interest subvention of 1.5 per cent to banks for providing short-term agri loans through KCC up to Rs 3 lakh at a concessional interest rate of 7 per cent per annum.
An additional Prompt Repayment Incentive of 3 per cent is provided to farmers on timely repayment of loans, which effectively reduces the rate of interest to 4 per cent for farmers. Loans up to Rs2 lakh are extended on a collateral-free basis, ensuring hassle- free access to credit for small and marginal farmers.
The Finance Minister in Budget Speech 2025-26 has announced to increase the loan limit under the Modified Interest Subvention Scheme from Rs3 lakh to Rs5 lakh which would further benefit the farmers.
As of 31.12.2024, a total of Rs10.05 lakh crore has been given under operative KCCs benefitting 7.72 crore farmers.