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IAS Preparation > UPSC Preparation Strategy > Kisan

Credit Card (KCC)

Kisan Credit Card

Scheme

The Kisan Credit Scheme (KCC) was introduced

in 1998 based on a model scheme prepared by
the National Bank for Agriculture and Rural
Development (NABARD).

The scheme was introduced to meet the various

credit requirements of the agriculture sector by
giving financial assistance to farmers.

This article will give details about the Kisan

Credit Card Scheme within the IAS Exam.

Overview of the Kisan Credit

Card Scheme
The Kisan Credit Card scheme was brought
about with the aim of simplifying the procedure
for farmers in getting adequate and timely
credit. This would help farmers in the purchases
of agriculture inputs such as seeds, fertilizers,
pesticides etc.

The KCC also covers post-harvest expenses,

consumption requirements, investment in credit
requirements for agricultural and allied
activities. The scheme is implemented by
Commercial Banks, Small finance banks and
cooperatives

Through the KCC scheme, farmers are

exempted from the high interest rates of the
loans offered by regular banks. The interest
rates for KCC is between 2%-4%. This low interest
rate helps farmers in repaying loans better, of
course taking into account the harvesting
period of the crop and the date at which the
loan was granted.

Find more information about the latest

Government Schemes, visit the linked article.

Benefits and Eligibility Criteria for the

KCC Scheme
The features of the Kisan Credit Card Scheme is
as follows:

Farmers will meet their financial

requirements along with any expenses
incurred during the post-harvest season

A loan of Rs.3 lakh can be sanctioned and

produce marketing loans can be obtained

The farmers eligible for the KCC scheme

will issued a savings account with
affordable interest rates

The KCC scheme will facilitate a hassle

free disbursement procedure and a
flexible repayment loans

No collateral will be required for loans that

amount up to Rs. 1.6 lakh

For a period of 3 years, credit will be

available and repayment can be made
post the harvest season.

There are certain subsidies and schemes

offered by the government regarding
interest rate. Availing these subsidies is
dependent on the repayment history and
general credit history of the cardholder.

Fees and other such as processing fees,

land mortgage deed charges etc would
be at the discretion of the issuing bank.

Limit to be fixed on the basis of operational

land holding, cropping pattern and scale
of finance.

The Card has a validity of 5 years post

which it will be subject to an annual
review. In case of a good credit score, the
card limit would be further extended to
include rising costs, incidental expenses or
change in cropping pattern etc

Rescheduling of loans and conversions will

be permitted in case of any damage to
crops due to an unforeseen event like
natural calamity etc.

For notes on UPSC Indian Economy, visit the

linked article.

Eligibility Criteria is as follows for the Kisan

Credit Card Scheme:

Individual farmers who are

owners/cultivators

Sharecroppers, tenant farmers

Self-Help Groups of sharecroppers,

farmers, tenant farmers etc

Farmers involved in the production of

crops or activities such as animal
husbandry

Fish farmers, fishers, SHGs, JLGs, and

women groups

Fishermen who own a registered boat or

any other type of fishing vessel and
possess the necessary license or
permissions for fishing in estuaries or the
sea.

Poultry farmers and even those who raise

sheep, rabbits goats pigs etc.

Dairy: Farmers, dairy farmers, SHGs, JLGs,

and tenant farmers who own, lease, or rent
sheds.

Kisan Credit Card Scheme:-

Download PDF Here

Frequently Asked Questions

related to Kisan Credit Card
Scheme

Q1 What are some of the advantages of the

Kisan Credit Scheme?

The following are some of the advantages of

the Kisan Credit Scheme:
Simplifies disbursement procedures

Removes rigidity regarding cash and

kind

No need to apply for a loan for every

crop

Assured availability of credit at any

time enabling reduced interest burden
for the farmer.

Helps buy seeds, fertilizers at farmer’s

convenience and choice

Q2 What will be the repayment period of a

loan acquired through the KCC?

The term loan component will be normally

repayable within a period of 5 years
depending on the type of activity /
investment as per the existing guidelines
applicable for investment credit.

Q3 How many Kisan Credit Card Schemes

have been issued?

As per the Finance Ministry, about 1.8 Kisan

Credit Cards with a credit limit of Rs 1.68
lakh crore have been sanctioned as of
January 8 2021.

For more information about upcoming

Government Exams, visit the linked article. More
exam-related preparation materials will be
found through the links given below

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