What is the Kisan Credit Card (KCC) Scheme?

The Kisan Credit Card (KCC) scheme was introduced to provide farmers with timely and hassle-free credit at concessional interest rates. This ensures that farmers can meet their short-term and long-term cultivation needs, post-harvest expenses, household consumption and other farming-related financial requirements.

With the revised limit of ₹5 lakh, the scheme now offers even greater financial security to farmers, allowing them to invest more in their agricultural activities without worrying about credit constraints.

How KCC Empowers Farmers

The KCC scheme plays a pivotal role in supporting farmers through various financial needs, including:

• Cultivation and Post-Harvest Activities: Ensures timely funds for farming operations and post-harvest costs.
• Marketing Loans: Helps bridge financial gaps until the produce is sold at competitive market rates.
• Household Consumption Needs: Prevents dependency on informal lenders by providing financial support for basic household expenses.
• Working Capital for Farm Assets: Supports maintenance and upkeep of essential farming equipment and infrastructure.
• Investment Credit for Allied Activities: Provides financial aid for animal husbandry, dairying, fisheries and other agricultural extensions.

Recognizing the growing importance of allied sectors, the KCC scheme was expanded in 2019 to include animal husbandry, dairying and fisheries. Farmers can now avail of collateral-free loans up to ₹1.60 lakh, fostering financial security in these sectors.

Understanding Short-Term Loans under MISS

The Modified Interest Subvention Scheme (MISS) offers concessional short-term agricultural loans to farmers at a 7% interest rate on loans up to ₹3 lakh. Additionally, an interest subvention of 3% is provided for timely repayment, effectively reducing the interest rate to just 4%. MISS also covers post-harvest loans against Negotiable Warehouse Receipts (NWRs) for small farmers under the KCC scheme.

Ensuring Transparency: Kisan Rin Portal (KRP)

To streamline the credit process, the Kisan Rin Portal (KRP) was launched in September 2023. Before its introduction, banks had to manually submit claims for Interest Subvention (IS) and Prompt Repayment Incentive (PRI) to the Reserve Bank of India (RBI) and NABARD, leading to delays. KRP has digitized this process, ensuring seamless transactions and faster claim processing for farmers and financial institutions alike.

By December 31, 2024, the KRP had processed claims worth a staggering ₹108,336.78 crore, benefiting 5.9 crore farmers under the MISS-KCC scheme.

Key Achievements in Agricultural Finance

The impact of these reforms in agricultural finance has been monumental. Here are some key highlights:

• As of March 2024, there are 7.75 crore operational KCC accounts with a total outstanding loan amount of ₹9.81 lakh crore.
• 1.24 lakh KCCs were issued for fisheries and 44.40 lakh KCCs for animal husbandry.
• Over the last decade, ₹1.44 lakh crore in interest subsidies has been disbursed under the KCC scheme.
• Institutional credit flow to agriculture has tripled since 2014-15, rising from ₹8.5 lakh crore to ₹25.48 lakh crore in 2023-24.
• Short-term agricultural credit has more than doubled, increasing from ₹6.4 lakh crore in 2014-15 to ₹15.07 lakh crore in 2023-24.
• The proportion of Small and Marginal Farmers accessing agricultural loans has grown from 57% in 2014-15 to 76% in 2023-24.

With the increase in the KCC loan limit to ₹5 lakh, farmers now have greater financial flexibility to expand their agricultural activities, invest in modern farming techniques and improve their livelihoods. This initiative under the Union Budget 2025-26 reaffirms the government’s commitment to empowering farmers, boosting agricultural growth and ensuring a self-sufficient and resilient rural economy.

The Kisan Credit Card scheme continues to be a game-changer, transforming agricultural credit accessibility and helping India’s farmers thrive. As financial support expands, the future of Indian agriculture looks promising, with enhanced productivity, better incomes and a stronger rural economy.

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