KCC: Kisan Credit Card Scheme @ 4% interest Per Annum

Rahul Verma
August 16, 2023
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Farming stands as the foundation of India’s economy, offering sustenance to numerous rural households. Acknowledging the significance of extending well-timed and reasonably priced credit to agriculturists, the Indian government introduced the Kisan Credit Card (KCC) program. This venture aspires to amplify the financial integration of farmers, ensuring their access to credit for a spectrum of agricultural and interconnected undertakings. Within this blog, we will explore the Kisan Credit Card initiative, scrutinizing its qualifying criteria, benefits, and plausible constraining elements.

Qualifying Criteria:

The Kisan Credit Card program is meticulously tailored to benefit farmers throughout the nation, whether they are individual or collective borrowers. The prerequisites are as follows:

Ownership of Land: Those who possess agricultural land, along with tenant farmers and sharecroppers, are entitled to apply for a Kisan Credit Card.

Age: There exists no age-related impediment to acquiring a KCC. Both young and senior farmers can avail themselves of the program’s advantages.

Creditworthiness: Applicants are anticipated to exhibit a reasonable credit history and substantiate their capacity to reimburse the loan.

Evidentiary Documentation: Applicants are required to furnish documents such as land records, proof of identity, proof of address, and photographs of passport dimensions.

Advantages of the Kisan Credit Card Initiative:

The Kisan Credit Card program confers a range of benefits upon farmers, rendering it an indispensable instrument for enhancing agricultural efficiency and rural prosperity.

Prompt Credit Access: The central advantage of the KCC is its provision of effortless and adaptable credit accessibility, enabling farmers to seamlessly manage diverse agricultural tasks as required.

Interest Subsidy: Under the program, farmers are entitled to an interest subsidy upon timely loan repayment. This encourages prudent borrowing and punctual reimbursement.

Comprehensive Approach: The KCC operates as an integrated credit card, extending credit for crop cultivation, post-harvest expenditures, operational capital for agriculture, and interconnected ventures such as animal husbandry and horticulture.

Flexible Repayment: Farmers have the liberty to repay their loans based on the crop cycle, thereby affording them the flexibility to reimburse when revenue is generated from their agricultural produce.

Insurance Coverage: A multitude of KCCs furnishes insurance coverage to shield farmers against crop loss, ensuring financial security during trying times.

Diminished Reliance on Informal Creditors: By delivering formal credit at reasonable interest rates, the KCC aids in curtailing farmers’ reliance on informal creditors who often levy exorbitant rates.

Constraining Factors and Challenges in KCC:

While the Kisan Credit Card initiative boasts numerous benefits, it is also beset by certain challenges necessitating attention:

Awareness and Extensiveness: Ensuring that all eligible farmers are well-informed about the program and can readily access KCCs persists as a challenge, particularly in remote and underdeveloped regions.

Effective Implementation: Proficient execution at the grassroots level entails harmonizing efforts among various stakeholders, encompassing financial institutions, agricultural departments, and farmers.

Inadequate Credit Ceiling: Some farmers might find the credit limit inadequate to cater to their authentic agricultural requisites, compelling them to supplement KCC loans with alternative credit sources.

Intricate Procedures: The processes of application and approval for KCCs can be intricate, deterring certain farmers from capitalizing on the benefits.

Financial Aspects: There is no initial investment required, and farmers can withdraw up to 25% of the loan amount even if they have not repaid the entire loan amount. The credit limit is with an interest rate of 4% per annum. The tenure is up to 5 years but may be shorter for farmers with a good repayment record.


The Kisan Credit Card initiative, set into motion by the Indian government, has manifested as an indispensable instrument for reshaping the agricultural panorama. By equipping farmers with formal credit accessibility and an array of other advantages, the initiative empowers them to enrich their agricultural efficiency and financial well-being. Although challenges persist, sustained endeavors to amplify awareness, simplify procedures, and augment implementation are poised to unquestionably propel the further triumph of this remarkable endeavor, promising a more radiant future for India’s agricultural community.


Frequently Asked Questions

FAQ 1: What is the Kisan Credit Card (KCC) scheme?

The Kisan Credit Card (KCC) scheme is a government initiative in India that provides farmers with access to affordable and timely credit for various agricultural and allied activities. It serves as an integrated credit card, offering loans for crop cultivation, post-harvest expenses, working capital, and other farming-related needs.

FAQ 2: Who is eligible to apply for a Kisan Credit Card?

The eligibility criteria for a Kisan Credit Card include landowners, tenant farmers, and sharecroppers. There is no age restriction, making both young and elderly farmers eligible. Additionally, applicants need to demonstrate creditworthiness, provide documentary proof such as land records and identity documents, and fulfill the criteria set by the lending institution.

FAQ 3: What are the advantages of the Kisan Credit Card scheme?

The KCC scheme offers several benefits to farmers:

  • Easy Credit Access: Farmers can obtain credit promptly and flexibly, enabling them to manage agricultural activities efficiently.
  • Interest Subsidy: Timely loan repayment entitles farmers to an interest subsidy, promoting responsible borrowing.
  • Diverse Usage: The KCC covers a range of agricultural needs, from crop production to post-harvest expenses and allied activities like animal husbandry and horticulture.
  • Flexible Repayment: Farmers can repay loans based on their crop cycles, aligning with their income generation.
  • Insurance Coverage: Many KCCs include insurance coverage to safeguard against crop loss and ensure financial security during hardships.
  • Reduced Dependence: By offering formal credit at reasonable interest rates, the KCC reduces farmers’ reliance on costly informal lenders.

FAQ 4: What challenges does the Kisan Credit Card scheme face?

While the KCC scheme has notable benefits, it encounters some challenges:

  • Awareness and Outreach: Ensuring that all eligible farmers are aware of the scheme and can access KCCs remains a challenge, particularly in remote areas.
  • Implementation: Effective execution requires coordination among various stakeholders, including financial institutions, agricultural departments, and farmers.
  • Credit Limit: Some farmers may find the credit limit insufficient to meet their agricultural needs, necessitating additional sources of credit.
  • Complex Procedures: The application and approval processes for KCCs can be complex, potentially discouraging some farmers from participating.

FAQ 5: How does the Kisan Credit Card scheme contribute to rural development?

The KCC similar to PMJAY: Health insurance scheme and KSV: Pension Scheme plays a crucial role in rural development by empowering farmers and enhancing their financial well-being. It enables farmers to invest in modern agricultural practices, procure quality inputs, and expand their operations. By promoting responsible borrowing and reducing dependency on informal lenders, the scheme contributes to stable rural economies. Additionally, the insurance coverage provided by many KCCs safeguards farmers against crop losses, ensuring their resilience in the face of challenges. Overall, the Kisan Credit Card scheme fosters agricultural growth, reduces poverty, and stimulates rural prosperity.

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