The Union Cabinet has taken a historic decision to increase the loan limit on Kisan Credit Cards (KCC) to ₹5 lakh. This massive increase will provide a significant boost to farmers in meeting their financial needs. Now, ₹3 lakh will be available for crops and ₹2 lakh for other agricultural activities. The biggest relief is that farmers will only have to pay a minimal interest rate of 4 percent for timely repayments, and they will also receive a collateral-free loan of up to ₹2 lakh. Learn about the unique benefits of the KCC scheme, when it was launched, and what documents you can easily apply with.
KCC Loan Limit ₹5 Lakh
Agriculture is the main source of income for millions of people in India, but farmers often face financial constraints in meeting essential needs, such as seeds, fertilizers, irrigation, and machinery. In this context, the Kisan Credit Card (KCC) is a crucial scheme that facilitates farming by providing timely loans to farmers.
Loan Split and Interest Rate Rebate
Under this massive scheme, farmers will receive a total loan of up to ₹5 lakh. This includes ₹3 lakh for crop cultivation and ₹2 lakh for other agricultural activities. The actual interest rate on this loan is 7%, with a government subsidy of 1.5%. Most importantly, if farmers repay the loan on time, they receive an additional 3% rebate. The government claims that as a result of this rebate, farmers effectively pay only 4% interest on the loan. Furthermore, this scheme provides a collateral-free loan of ₹2 lakh. This means you won’t have to mortgage any property to pay this ₹2 lakh.
A Financial Revolution Launched in 1998
The Kisan Credit Card (KCC) is a powerful financial tool that provides farmers with access to low-interest loans to meet their farming needs. This revolutionary scheme was launched by NABARD (National Bank for Agriculture and Rural Development) in 1998. The card’s most significant advantage is that farmers can withdraw funds from the bank as needed and use them whenever they wish.
Who Can Get a Kisan Credit Card?
The KCC facility is not limited to crop farmers; it is also available to small and marginal farmers and landless agricultural laborers. Additionally, those involved in animal husbandry, fisheries, sericulture, horticulture, and dairy can also benefit from this excellent scheme. Self-help groups (SHGs) and joint liability groups (JLGs) are also eligible for the KCC.
Applying for a KCC
The process of obtaining a Kisan Credit Card has now become quite simple, with both online and offline options available. You can visit your nearest government, private, rural, or cooperative bank branch to fill out the KCC form. This facility is now also available online; applications can be made by visiting the PM Kisan portal or the respective bank’s website.
The application requires essential documents such as an Aadhaar card, land records (Patnama/Land Proof), passport-sized photo, bank passbook, and PM-Kisan ID (if a beneficiary). The bank reviews your documents and agricultural activities, determines your credit limit, and then issues the card.
KCC’s Significant Benefits
KCC has become an essential financial support for farmers today. It provides easy access to funds for seeds, fertilizers, pesticides, and irrigation needs during each farming season. The interest rate (up to 4%) on loans obtained through KCC is significantly lower than that of regular agricultural loans, and additional interest rebates are also available for timely repayment.
KCC cards are now issued like ATM cards, allowing farmers to withdraw money from anywhere. They also offer crop insurance coverage, which provides significant relief in the event of a natural disaster or loss. KCC empowers farmers to escape the clutches of moneylenders, access funds at low interest rates, and protect their crops from damage.