Union Finance Ministry reported surge in total amount under operative Kisan Credit Card (KCC) accounts has from ₹4.26 lakh crore in March 2014 to ₹10.05 lakh crore in December 2024, more than doubling in a decade. This expansion has benefited 7.72 crore farmers, significantly increasing the availability of affordable working capital loans for agricultural and allied activities.
Key Highlights
The sharp rise in KCC credit indicates:
- Deepening institutional credit in agriculture.
- Reduced dependency on informal lending sources.
- Enhanced access to affordable loans for farmers.
- Strengthening agricultural credit ecosystem
About Kisan Credit Card (KCC)
The KCC scheme was introduced to ensure farmers get timely and affordable credit for agricultural operations, including:
- Purchase of agricultural inputs such as seeds, fertilizers, and pesticides.
- Cash flow for crop production and allied activities.
- Covering working capital needs for animal husbandry, dairy, and fisheries (since 2019).
Key Features of KCC Loans
Modified Interest Subvention Scheme (MISS):
The government provides 1.5% interest subvention to banks for offering short-term agricultural loans up to ₹3 lakh at a concessional interest rate of 7% per annum.
An additional Prompt Repayment Incentive (PRI) of 3% is provided for timely repayment, effectively reducing the interest rate to 4% for farmers.
Collateral-Free Loans:
Loans up to ₹2 lakh are collateral-free, ensuring easier access to credit for small and marginal farmers.
Budget 2025-26 Announcements
The loan limit under MISS is set to increase from ₹3 lakh to ₹5 lakh, further improving access to affordable credit for farmers.
Significance of KCC Growth
Expands financial inclusion by increasing the number of farmers benefiting from institutional credit.
Boosts agricultural productivity by providing farmers with easier access to working capital.
Reduces farmer dependence on moneylenders and high-interest informal credit sources.