Farmers can quickly get financing thanks to the Indian government’s Kisan Credit Card initiative. NABARD created the Kisan Financing Card (KCC) program in 1998 to provide farmers with short-term formal credit (National Bank for Agriculture and Rural Development).
The scheme was established to ensure farmers in the agricultural, fishing, and animal husbandry industries could obtain the financing they needed. To do this, we helped them apply for short-term loans and gave them a credit limit for equipment purchases and other costs.
Additionally, farmers who use KCC are spared from the high-interest rates associated with the standard loans provided by banks because the interest rate for KCC starts at a low of 2% and averages at 4%. With this program, farmers can pay back their loans following the crop’s harvesting season.
- Commercial Banks
- Regional Rural Banks (RRBs)
- Small Finance Banks
What is the Indian government’s scheme Kisan Credit Card Yojana?
Farmers can obtain short-term loans through the Kisan Credit Card Yojana to cover their farming expenditures. The credit limit is determined by the card-issuing banks depending on ripe crops, maintenance costs, and the profit margin. For marginal farmers, a credit limit between 10,000 and 50,000 is available. Farmers benefit from the Kisan Credit Card Yojana because it successfully supports their agriculture.
KCC Scheme Benefits and Eligibility Criteria
The Kisan Credit Card Scheme has the following characteristics:
- Farmers will cover all their post-harvest expenses and their own financial needs.
- It is possible to get marketing loans and a loan of Rs. 3 lakh.
- Farmers who qualify for the KCC program will receive savings accounts with reasonable interest rates.
- The KCC plan would make loans with flexible repayment terms and a hassle-free disbursement process possible.
- No security will be needed for loans up to Rs. 1.6 lakh.
- After the harvest, three years of credit will be available for repayment.
- A credit will be provided for three years, and repayment can be made after the harvest.
- Regarding interest rates, the government provides several subsidies and programs. These benefits are based on the cardholder’s overall credit history and history of on-time payments.
- The issuing bank will decide on fees and other expenses, such as processing fees, land mortgage deed charges, etc.
- A cap will be set based on operational land holding, cropping patterns, and financial resources.
What are a few perks of the Kisan Credit Scheme?
Among the benefits of the Kisan Credit Scheme are the following:
- Streamlines payment processes
- Removes restrictions on payment and behavior
- There is no need to get a loan for each crop.
- Guaranteed loan availability at all times
- Helps the farmer by paying less interest.
Features of Kisan Credit Card
- The program includes an ATM-capable RuPay debit card with one-time documentation capabilities, cost escalation incorporated into the cap, and any number of drawers within the cap.
- Along with guaranteeing saturation, banks would also take action to link the names of farmers with an Aadhaar card. Interest rate benefits will not be provided if the beneficiary’s accounts are not linked Aadhaar card.
- The government has also implemented several initiatives to make KCC effective. Including expanding the number of farmers who engage in fisheries and animal husbandry, eliminating the processing fee for KCC loans, and increasing the maximum amount for collateral-free agriculture loans from Rs. 1 lakh to Rs. 1.6 lakh.
- The KCC facility will assist farmers in the fisheries and animal husbandry industries in meeting their short-term credit needs for raising livestock, poultry, fish, shrimp, and other aquatic species and fishing.
Goals of the Kisan Credit Card Yojana
The Pradhan Mantri Kisan Credit Card Yojana has the following goals:
- Lower the transaction costs for banks
- Reduce the number of active bank branches.
- The banks’ business should grow.
- Simplify the loan application and documentation processes.
- Simplify the procedures for loan approval and payment.
- Enhance the use of recycled money
- Better loan recovery in the finance sector
- To fulfill the short-term monetary needs for crop cultivation.
- Cost following harvest.
- Loan for product marketing.
- Household consumption needs for farmers.
- Working capital for agriculture-related schemes and the upkeep the farm equipment.
- The necessity for investment loans in agriculture and related sectors.
Provisions for Finance:
To guarantee that farmers can obtain an agricultural loan at a fair rate of 7% annually:
- The Government of India has implemented a 2% interest subsidy scheme for short-term crop loans up to Rs. 3 lakh.
- The Government of India also offers farmers a 3% incentive for timely repayment and a 2% interest subsidy.
Kisan Credit Card Scheme’s Achievements
- By June 2020, the Nationwide Fishery KCC had approved over 25 lakh applications.
- The government has said that as part of the Atmanirbhar Bharat Package, it will provide 2.5 crore farmers with Kisan Credit Cards (KCC) and a credit boost of Rs. 2 lakh crores through a particular saturation drive.
- A key milestone aim of covering more than 1.5 crore farmers under KCC with a sanctioned loan ceiling of Rs. 1.35 lakh crore has been reached due to sustained efforts.
Beneficiaries under KCC Scheme:
Small, marginal, sharecropper, oral lessee, and tenant farmers are all eligible farmers under the KCC scheme. In addition, benefits under the program above may also be obtained by Self Help Groups (SHGs) or Joint Liability Groups (JLGs).
Measures taken to guarantee ease of application by KCC:
- Simple one-page forms have been created so that the necessary information can be found in the bank’s records under PM KISAN and that just a copy of the land record and information regarding the crops grown need to be filled out.
- The recipients can cut out and fill out the one-page form and will be supplied with an advertisement that will appear in all major newspapers nationwide.
- All Scheduled Commercial Banks (SCB) websites, the Department of Agriculture, Cooperation & Farmers Welfare website (www.agricoop.gov.in), and the PM-KISAN portal are other places where the form can be obtained (www.pmkisan.gov.in).
- Additionally permitted to complete the form and send it to the relevant bank branches are Common Service Centers (CSC).
Farmers can obtain short-term loans to cover their cultivation and equipment costs through the Kisan Credit Card program. They can pay back the loans either after a successful harvest or in manageable installments. The program offers a simple application and approval process for prompt funding disbursement. To learn more about KCC benefits take the “Kisan Credit Card Scheme” course on the ffreedom app. In addition, the ffreedom app provides extensive business, finance, and farming courses and modules that can help you gain in-depth knowledge in these areas and boost your career.