• The amount under operative Kisan Credit Card (KCC) accounts has crossed Rs 10 lakh crore, benefiting 7.72 crore farmers as of December 31, 2024, the Ministry of Finance said on February 25.

• The operative KCC amount stood at Rs 4.26 lakh crore in March 2014.

• This indicates a significant increase in the quantum of affordable working capital loans provided to farmers for agriculture and allied activities.

Kisan Credit Card

• The government of India introduced the Kisan Credit Card (KCC) to enable farmers to meet their short-term working capital requirements promptly and hasslefree. This has helped enhance the working capital flow to agriculture and allied sectors. 

• The KCC scheme was launched in 1998 for issuing Kisan Credit Cards to farmers on the basis of their land holdings for uniform adoption by the banks so that farmers may use them to readily purchase agriculture inputs such as seeds, fertilizers, pesticides, etc and draw cash for their production needs.

• In 2019, the KCC scheme was extended to cover the working capital requirements of allied activities like animal husbandry, dairy and fisheries.

• Loans up to Rs 2 lakh are extended on a collateral-free basis, ensuring hassle-free access to credit for small and marginal farmers.

• The government, under the Modified Interest Subvention Scheme (MISS), provides interest subvention of 1.5 per cent to banks for providing short-term agri loans through KCC up to Rs 3 lakh at a concessional interest rate of 7 per cent per annum.

• An additional Prompt Repayment Incentive of 3 per cent is provided to farmers on timely repayment of loans, which effectively reduces the interest rate to 4 per cent for farmers.

• Finance Minister Nirmala Sitharaman, in Budget Speech 2025-26, announced an increase in the loan limit under the Modified Interest Subvention Scheme from Rs 3 lakh to Rs 5 lakh, which would further benefit the farmers.

Additional Read:

Schemes for institutional credit in agriculture

The Economic Survey 2024-25 highlights that providing adequate credit support to all farmers, especially small and marginal farmers and vulnerable sections of society, is crucial to improving agricultural productivity and income. 

Manorama Yearbook app is now available on Google Play Store and iOS App Store