As KCC loan limit rises to ₹5 lakh; 7.72 crore farmers avail scheme. ₹10.2 lakh crore loans outstanding

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New Delhi: The Ministry of Agriculture and Farmers Welfare has highlighted the growing role of the Kisan Credit Card Scheme in improving farmers’ access to affordable institutional credit, with more than 7.72 crore active Kisan Credit Cards (KCCs) currently in operation across the country.

According to official data released by the government, the scheme has enabled farmers to access outstanding credit worth ₹10.2 lakh crore, reflecting the programme’s expanding reach in supporting agricultural and allied activities.

The KCC scheme, first introduced in 1998, was designed to simplify access to short-term credit for crop cultivation. Over time, it has evolved into a broader financial instrument supporting a wide range of farm and allied sector needs.

Credit access expanded under new reforms

Recent reforms under the Modified Interest Subvention Scheme have significantly expanded the credit limits available to farmers.

The government has increased the crop loan limit from ₹3 lakh to ₹5 lakh, while the collateral-free credit limit has been raised from ₹1.6 lakh to ₹2 lakh per borrower starting January 2025.

Short-term agricultural loans of up to ₹3 lakh are available at 7 per cent interest, with an additional 3 per cent incentive for timely repayment, effectively lowering the interest rate to 4 per cent.

Officials say these measures aim to ensure that farmers have adequate working capital for crop cultivation, post-harvest operations, marketing expenses, and allied activities such as dairy, poultry, fisheries, and beekeeping.

Inclusive credit coverage for diverse farmers

The scheme covers a broad range of beneficiaries including owner-cultivators, tenant farmers, sharecroppers, and oral lessees.

It also extends to Self-Help Groups (SHGs) and Joint Liability Groups (JLGs), enabling collective access to credit for farmers who may lack formal land ownership documentation.

Government officials say the approach is intended to promote financial inclusion across diverse farming communities, particularly among small and marginal farmers.

Digital platforms streamline loan access

To improve implementation and monitoring, the government launched the Kisan Rin Portal in September 2023.

The portal integrates farmer profiles, loan disbursement data, interest subvention claims, and scheme performance indicators into a unified digital system.

Officials say the platform enables faster loan processing and enhances transparency by allowing banks to submit and process subsidy claims digitally.

A simplified one-page KCC application form has also been introduced, with basic applicant information pre-filled using records from the Pradhan Mantri Kisan Samman Nidhi database.

Applications can be submitted through bank branches or digitally via Common Service Centres (CSCs), expanding access in rural areas.

Extensive banking network supports the scheme

The KCC platform currently includes 457 banks, comprising 37 commercial banks, 46 regional rural banks, and 374 cooperative banks.

Together, these institutions have processed over 1,998.7 lakh KCC applications, with cooperative banks playing a particularly important role in extending agricultural credit at the grassroots level.

Growing support for allied sectors

The scheme has also expanded to support allied agricultural activities.

In 2018–19, the government extended KCC coverage to fishers and fish farmers, allowing them to access institutional credit for fisheries and aquaculture operations.

Recent data shows strong demand from allied sectors. In animal husbandry, 55.9 lakh applications were received, with 55.08 lakh accepted and 39.22 lakh loans sanctioned.

Similarly, the fisheries sector recorded 6.83 lakh applications, of which 4.82 lakh were sanctioned, indicating growing integration of allied activities into the formal credit system.

Boosting farm productivity and resilience

Officials say the availability of affordable credit has helped farmers invest in better seeds, fertilisers, and farm equipment, contributing to improved productivity and higher incomes.

The scheme also includes risk-mitigation provisions. In cases of natural disasters, interest payments can be deferred for up to one year, extendable to five years in severe cases.

Approximately 76 per cent of agricultural credit accounts under the scheme belong to small and marginal farmers, highlighting its role in supporting vulnerable segments of the rural economy.

A key pillar of rural financial inclusion

The government says the continued expansion of the Kisan Credit Card scheme reflects a broader shift toward strengthening institutional credit in agriculture and reducing farmers’ reliance on informal lending.

Officials note that reforms such as higher credit limits, digital integration, and expanded coverage of allied sectors have improved the efficiency and reach of agricultural finance.

As climate and market uncertainties increasingly affect farming incomes, policymakers view the KCC scheme as a key instrument for strengthening rural financial resilience and sustaining long-term agricultural growth.

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