This document discusses the Kisan Credit Card (KCC) scheme, a program aimed at improving farmers' access to bank credit in India. The key points are:
1) The KCC scheme provides revolving cash credit to eligible farmers, covering their entire annual production and ancillary credit needs. Limits are set based on landholding size and cropping patterns.
2) The scheme's target groups are all categories of farmers, including small farmers and vulnerable groups. It aims to provide timely and adequate credit to support cultivation.
3) Benefits of the KCC include simplified documentation, assured credit access for 3 years, flexibility in credit use, and life insurance coverage for cardholders. The program aims
This document discusses the Kisan Credit Card (KCC) scheme, a program aimed at improving farmers' access to bank credit in India. The key points are:
1) The KCC scheme provides revolving cash credit to eligible farmers, covering their entire annual production and ancillary credit needs. Limits are set based on landholding size and cropping patterns.
2) The scheme's target groups are all categories of farmers, including small farmers and vulnerable groups. It aims to provide timely and adequate credit to support cultivation.
3) Benefits of the KCC include simplified documentation, assured credit access for 3 years, flexibility in credit use, and life insurance coverage for cardholders. The program aims
This document discusses the Kisan Credit Card (KCC) scheme, a program aimed at improving farmers' access to bank credit in India. The key points are:
1) The KCC scheme provides revolving cash credit to eligible farmers, covering their entire annual production and ancillary credit needs. Limits are set based on landholding size and cropping patterns.
2) The scheme's target groups are all categories of farmers, including small farmers and vulnerable groups. It aims to provide timely and adequate credit to support cultivation.
3) Benefits of the KCC include simplified documentation, assured credit access for 3 years, flexibility in credit use, and life insurance coverage for cardholders. The program aims
Kisan Credit Card A State Intervention for Financial Inclusion:
A Case Study of Khanikar Village, Dibrugarh Submitted by: !I"A#KA KAK$%I Lecturer, Dr. Radha Krishnan School of Arts, Commerce Science !mail: priyan"a.dib#$mail.com #A%I$#A& S'(I#A! %& )FI#A#CIA& I#C&*SI$# F$! 'C$#$(IC D'V'&$('#% I# #$!%+ 'AS% I#DIA, ISS*'S A#D C+A&&'#-'S. (arch /, 0123 %r$ani'ed by: D'A!%(A#% $F 'C$#$(ICS Dibrugarh *niversity P a g e | 2 A4S%!AC% (n the recent years, the Reser)e *an" has been a$$ressi)ely pursuin$ financial inclusion on the belief and understandin$ that financial inclusion is a necessary pre+condition for inclusi)e $ro,th. De)elopment e-perience o)er the last si-ty years from around the ,orld clearly e)idences that ,hat the poor ,ant is not charitably $i)en, but opportunity to impro)e their incomes and thereby their .uality of life. /inancial inclusion is a necessary condition for pro)idin$ such an opportunity to the poor not only to raise their incomes but also to insulate their families a$ainst income shoc"s and meet emer$encies such as loss of 0ob, illness or death in the family. *oth the 1o)ernment and the Reser)e *an" ha)e ta"en se)eral initiati)es to further financial inclusion. A$riculture is surely the life line of a ma0ority of the people in the country includin$ in the &orth !ast. A$riculture is one of the "ey priority sectors for lendin$ by ban"s2 under the priority sector lendin$ sector, ban"s are re.uired to ensure that at least 345 of their ad)ances $oes to a$riculture. !)en so, ,e are a,are that millions of small farmers, many of them farmin$ at subsistence le)els, do not $et access to credit for a )ariety of reasons. Simplified Kno, 6our Customer $uidelines, 7no frill8 accounts, Kisan Credit Cards, 1eneral Credit Cards and o)er+ draft facilities ha)e all been desi$ned "eepin$ the rural borro,er in mind. Thus, this paper ,ill attempt to discuss the )arious ad)anta$eous aspects of usin$ Kisan Credit Card 9KCC:. The paper also see"s to study the socio+economic status of the farmers usin$ KCC in Khani"ar )illa$e. /or the purpose of the study, thirty beneficiaries ,ere sur)eyed and their )ie,s and opinions considered. To,ards the end of the paper, su$$estions are also pro)ided for the better implementation of the scheme amon$ the farmin$ community. P a g e | 3 252 Introduction The sta$nation in a$ricultural producti)ity, increase in cost of production, distortions in the mar"et and poor infrastructure ha)e made the li)elihood of farmin$ population more difficult. A lar$e number of po)erty ; ridden farmin$ households especially mar$inal and small farmers, tenant farmers, oral lessees, share croppers and a$ricultural labourers e"e out li)in$ from a mi- of subsistence acti)ities li"e animal husbandry especially of small ruminants, ,a$e labour, horticulture, forestry, plantation, lo$$in$ etc.. The reasons of per)asi)e rural po)erty are lo, $ro,th rate in a$riculture, lo, producti)ity, failed crops, unemployment, and inade.uate command o)er resources due to lo, income le)el, lo, adoption of a$ricultural technolo$y, non+ access to credit and e)en ine.uitable access to credit. A$ricultural $ro,th is the panacea for rural po)erty alle)iation. Strate$ies are re.uired to enhance the present rate of $ro,th of a$riculture from 3.< per cent to at least = per cent in order to achie)e the double di$it $ro,th rate of 1DP. !nhanced $ro,th rate in a$riculture ,ill not only impro)e the income and employment le)els of farm households but also reduce the le)el of po)erty, address the hun$er, malnutrition, promote rural prosperity and miti$ate rural distress. (n order to achie)e the hi$her $ro,th rate in a$riculture the 1o)ernment promotes adoption of ne, a$ricultural technolo$y for hi$her producti)ity. The adoption of ne, a$ricultural technolo$y re.uires intensi)e use of inputs and pac"a$e of practices. This stimulates public and pri)ate in)estment in a$riculture and substantial increase in the re.uirement of production and in)estment credit. The institutional sources of credit meet >3 per cent of the credit re.uirements of the farm sector. /armers hea)ily depend on non institutional sources of credit due to fre.uent needs, inade.uate a)ailability of institutional credit, unnecessary delays, cumbersome procedure and improper practices adopted by institutional lendin$ a$encies. Due to hi$h cost of credit from the non+institutional sources the producti)e capacity of the borro,er farmer is deterioratin$. The small borro,ers are also interested in ade.uate supply of credit rather than lo,er rates of interest. 1i)en the enormity of the credit re.uirements on one hand and the )a$aries of the nature on the other, financin$ a$riculture has been a $i$antic tas" for ban"s in (ndia. !nsurin$ timeliness and ade.uacy of credit to farmers ha)e posed the most serious challen$es to ban"s en$a$ed in financin$ a$riculture. /inancial sector reforms, ushered in as a part of the liberali'ation of the (ndian economy in the be$innin$ of nineties, has infused a spirit of competiti)eness and enterprise amon$ the ban"s in their endea)or for ser)in$ their customers in the best possible manner. &A*ARD has been playin$ a proacti)e and catalytic role in $uidin$ the ban"s to meet the emer$in$ challen$es. To,ards this end, se)eral inno)ati)e strate$ies ha)e been e)ol)ed by &A*ARD. The instrument of Kishan Credit Card 9KCC: is one of the "ey products de)eloped to impro)e the farmer?s accessibility to ban" credit, simplify credit deli)ery P a g e | 4 mechanism and pro)ide more fle-ibility in use of credit. @odel scheme of Kishan Credit Card formulated by &A*ARD in 3AA4+AA is bein$ implemented in all the States and Bnion territories. 250 $b6ective of Kishan Credit Card sche7e As a pioneerin$ credit deli)ery inno)ation, Kishan Credit Card Scheme aims at pro)idin$ ade.uate and timely credit support from the ban"in$ system to the farmers for their culti)ation needs includin$ purchase of inputs in a fle-ible, hassle free and cost effecti)e manner. 25052 %arget -rou8s of KCC The tar$et $roups of beneficiaries for KCCs are all cate$ories of farmers and also )ulnerable $roups li"e defaulter+farmers, oral lessees, tenant farmers,share croppers and others ,ho ha)e been left outside the fold of KCC scheme for any reason and also ne, farmers. The KCC scheme co)ers 9i: production credit 9ii: ,or"in$ capital re.uirements for allied acti)ities 9iii: ancillary credit re.uirements related to crop production 9i): contin$ent needs and 9): accidental insurance of KCC borro,ers. Crop loans disbursed under KCC scheme for notified crops are co)ered under &ational Crop (nsurance scheme. The purpose of the scheme is to protect the interest of farmers a$ainst crop loss caused by natural calamities, pest attac"s etc. Total AC.<= million credit cards ,ere issued by the a$encies at the end of /ebruary, DC3C. 253 Kishan Credit Card sche7e Salient features a. !li$ible farmer ,ill be pro)ided a Kishan Credit Card and a Pass *oo" or a Card+ cum+Passboo". b. Re)ol)in$ cash credit facility allo,in$ any number of dra,als and repayments ,ithin the limit. c. !ntire production credit needs for full year plus ancillary acti)ities related to crop production to be considered ,hile fi-in$ limit. (n due course, allied acti)ities and non farm short term credit needs may also be co)ered. d. Limit to be fi-ed on the basis of operational land holdin$, croppin$ pattern and scales of finance. e. Seasonal sub limits may be fi-ed at the discretion of ban"s. f. Limit of )alid for E years sub0ect to annual re)ie,. $. Con)ersion Freschedulement of loans also permissible in case of dama$e to crops due to natural calamities. h. As incenti)e for $ood performance, credit limits could be enhanced to ta"e cares of increase in costs, chan$in$ in croppin$ pattern etc. P a g e | 5 i. Security, mar$in and rate of interest as per R*( norms. 0. %perations may be throu$h issuin$ branch F PACS or throu$h other desi$nated branches at the discretion of ban". ". Githdra,als throu$h slips Fche.ues accompanies by card and passboo". l. Personal Accident (nsurance of Rs. >C,CCC for death and permanent disability and Rs. D>,CCCF+ for partial disability a)ailable to Kishan Credit Card holder at an annual premia of Rs. 3>F+ per annum. 259 Advantages of KCC sche7e a: /ull year?s credit re.uirement of the borro,er ta"en care of. b: @inimum paper ,or" and simplification of documentation for ,ithdra,l of funds from the ban". c: Access to ade.uate and timely credit to farmer. d: Assured a)ailability of credit for E years and a)oidance of uncertainly in)ol)ed in accessin$ credit on a year to year basis. e: Annual re)ie, of limit and pro)ision for enhancement sub0ect to satisfactory operations. f: /le-ibility in use of credit and sa)in$ in interest burden. $: /le-ibility of dra,in$ cash from a branch other than the issuin$ branch at the discretion of the ban". h: A)ailability of the life co)erF disability insurance at )ery lo, premium in case the farmers meets ,ith accident. 25: rogress of Kishan Credit Card sche7e Accordin$ to the 1o)ernor of The Reser)e *an" of (ndia, the north+east poses a more comple- challen$e for financial inclusion because of difficult terrain, lo,er population densities, poor infrastructure, inade.uate communication facilities and la, and order disruptions. Re$ardless, R*( ,ants to ensure that financial inclusion in &!R is at par ,ith that in the rest of the country. @any steps ha)e been ta"en in the &!R to increase credit flo, to a$riculture. Since Assam is one of the states selected under the scheme of 7*rin$in$ 1reen Re)olution in !astern (ndia8 implemented by the 1o)ernment of (ndia, the annual credit plan for a$riculture for Assam has been re)ised up,ards. Ge ,ant ban"s to sanction KCCs to all eli$ible farmers in the State. P a g e | 6 (n Assam, bloc"+,ise ,ee"ly credit camps are bein$ or$anised to brin$ more and more farmers under the KCC. The loan application format has been simplified and ,here)er land documents are not a)ailable, the Hilla$e Panchayat?s certification is considered sufficient for $rant of a loan. The e-ercise is bein$ replicated in other &!R states as ,ell. 052 Area of Study The present study has been conducted on the )illa$ers of Khani"ar )illa$e, ,hich is at a distance of I+4 Kilometers a,ay from Dibru$arh To,n. 050 $b6ectives of the Study The ma0or ob0ecti)es of the present study are: i: To e)aluate the implementation of KCC 9Kisan Credit Card: scheme in Khani"ar )illa$e, Dibru$arh. ii: To assess the socio+economic de)elopment of the )illa$ers usin$ the KCC scheme. 053 (ethodology of the Study (ethod: Considerin$ the nature of the data collected, descripti)e and analytical method has been adopted in the present study. o8ulation: The population of this study comprised of all the )illa$ers of Khani"ar )illa$e. Sa78le: /or the purpose of the study the researchers ha)e selected EC beneficiaries of KCC scheme as sample. Simple random samplin$ has been adopted for selectin$ the sample. 059 %ools *sed For Collection of Data /or the purpose of this study, a ,ell or$ani'ed structured .uestionnaire schedule has been used for the collection of the data from the sample respondents. 05: Collection of Data (n order to collect the data, the researchers ha)e ta"en an inter)ie, schedule on the )illa$ers of Khani"ar )illa$e, ,hich is situated at a distance of I+4 Km from Dibru$arh To,n. Respondents ,ere inter)ie,ed carefully on a number of .uestions and supplementary .uestions throu$h face to face interactions and their ans,ersFreplies ,ere noted do,n for the composition of the literature of the paper. 352 Analysis of Data: P a g e | 7 (t has also been obser)ed that some farmers ha)e efficiently used this scheme for $ro,in$ crops and ha)e yielded better results. The study re)ealed that the role of credit under KCC scheme in influencin$ fertili'er consumption and crop yield ,as .uite positi)e and si$nificant. The a)era$e producti)ity of paddy $ro,n by KCC farmers is hi$her than non KCC farmers. The main reasons of hi$her yield ,ere due to au$mented use of inputs li"e fertili'er, manure, pesticide, labour, irri$ation etc by KCC farmers. The share of non+institutional sources of credit has come do,n due to a)ailability of KCC facilities. The cost of borro,in$ of credit has sho,n a mar"ed decrease amon$ KCC holders. *ut it seems from the en.uiry from the fe, ban" branches no substantial pro$ress has been made in issuin$ the KCC to these disad)anta$ed $roups. These )ulnerable $roups are also not a,are of their eli$ibility to a)ail the facilities. &either the ban"s are interested to e-tend the facilities to them in order to a)oid the ris" of reco)ery. %nly the positi)e relationship e-ists bet,een borro,in$ under KCC scheme and land, household si'e and le)el of education. The researchers ha)e found out that althou$h KCC scheme has been implemented to some e-tent in Khani"ar )illa$e, yet 4C5 people ha)e not successfully implemented this scheme. The basic reason that can be hi$hli$hted is the lac" of a,areness of the respondents. @ost of the respondents ,ere not a,are of the benefits that can be reaped throu$h timely return. (t has been obser)ed that some farmers apply for Kishan Credit Card and then use the finance for other personal purposes li"e marryin$ their dau$hters off, buildin$ "utcha houses, buyin$ t,o ,heelers. Althou$h, settin$ of camps for spreadin$ a,areness amon$ the rural fol" has been proposed by The Reser)e *an" of (ndia, yet this has not been reali'ed in this area. Problems are fear factor of non+repayment of loan, lac" of a,areness of benefits of institutional 9KCC: credit, bad e-perience ,ith institutional sources of credit especially ,ith cooperati)e ban"s and inefficient and non+transparent operational system of credit deli)ery under KCC scheme due to e-ploitation of bro"ers and apathetic attitude of the officials of the ban". 350 Suggestions 3. /inancial literacy relatin$ to repayment discipline should also be imparted by the a$encies to the e-istin$ and prospecti)e borro,ers of KCC in order to arrest the problem of misutili'ationF di)ersion of credit. D. A$encies should ma"e pro)ision for fle-ibility of ,ithdra,als from a branch other than the issuin$ branch in order to impro)e the operational efficiency. E. AT@ facilities to be pro)ided to KCC holders in order to reduce the fre.uency of )isit to the ban"+branch durin$ the specified ,or"in$ hours and for con)enient ,ithdra,als at any time. P a g e | 8 =. Ceaseless efforts to be made by the a$encies to brin$ the )ulnerable $roups li"e tenant farmers, share croppers etc. >. There is the ur$ent need to ma"e the credit deli)ery system under KCC scheme cost effecti)e, transparent and farmers? friendly throu$h appropriate institutional reforms. Conclusion Jence, it can be concluded that "eepin$ in mind the financial needs of the a$ricultural sector, financial institutions alon$ ,ith the 1o)ernment of (ndia has ta"en steps to boost the credit to the a$ricultural sector. Jo,e)er, there are loopholes in the system ,hich needs to be mended. The basic need of the hour is to ma"e these schemes more accessible and transparent. @oreo)er, a,areness of these schemes in detail should be imparted to the tar$et sections so that they can ma"e optimi'e use of these credit schemes. 4ibliogra8hy 3. 1o)ernment of (ndia 9DCCI+C4:, KKisan Credit Card 9KCC: Scheme?, !conomic Sur)ey, pp 4A+AC. D. 1o)ernment of (ndia 9DCCA+3C:, !conomic Sur)ey?, @inistry of /inance, pp A4+ AA, 34C. E. &A*ARD 93AAA:, Kisan Credit Card, @umbai. =. &A*ARD 9DCCI+C4:, KKisan Credit Card Scheme?, Annual report, @umbai, pp D<+DI. >. &A*ARD 9DC3C:, KStudy on KCC?, Annual Report, @umbai, pp D4 + DA, I>. <. Patil, *alasaheb Hi"he 9DCC4:, KA$ricultural (ndebtedness: Crises and Re)i)al?, !conomic and Political Gee"ly, /ebruary CD, pp =I+>D. I. Plannin$ Commission 9DCC4:, KDraft Report of the Committee on /inancial Sector Reforms?, &e, Delhi. 4. Rao, C.J. Janumanth 9DCCA:, K(nclusi)e 1ro,th: Recent !-perience and Challen$es Ahead?, !conomic and Political Gee"ly, @arch D4, Hol. LL(H &o. 3E, pp 3<+3A. A. Sharma, R.D. 93AI4:, 7*an" credit and A$ricultural Transformation in *ac",ard Re$ion, 7The (ndian !conomic Mournal, Hol. D<, p. <>. 3C. Sin$h, 1. 93AI3:, KShortcomin$s in the !-istin$ Credit System,? /inancin$ A$riculture, Hol. E pp D= ; DI.