Kisan Credit Card - Agricultural Credit Card

Kisan Credit Card (KCC) is a government-supported agricultural credit scheme enabling farmers to access short-term credit for purchasing seeds, fertilizers, pesticides, farm machinery, and other agricultural inputs. Introduced in 1998, the scheme aims to facilitate agricultural credit at affordable rates. Eligibility includes all farmers: marginal, small, medium, and large landholders; tenant farmers and oral lessees are also covered. KCC applications are submitted to the nearest commercial bank, cooperative bank, or regional rural bank branch. Banks determine credit limits based on cropping patterns, land holdings, and annual agricultural expenditure. The credit limit typically ranges from 4 times annual income or 80% of annual farm expenditure, whichever is higher. Interest subsidy is provided by the government on loans up to Rs. 3 lakhs: subsidized rate is 4% per annum (government pays 4% subsidy; farmer pays remaining bank rate). For loans exceeding Rs. 3 lakhs, full bank rates apply without subsidy. KCC operates as a revolving overdraft account; farmers withdraw funds as needed within their sanctioned limit rather than as a lump sum. Each KCC is automatically linked to the Pradhan Mantri Fasal Bima Yojana (PMFBY), providing crop insurance coverage at subsidized premiums (farmer pays 1-2% premium; government pays remainder). The card also acts as a debit card for non-agricultural transactions at ATMs and retailers. Repayment is flexible; farmers repay after harvest. A critical pitfall: many farmers use KCC for non-agricultural purposes (personal expenses, consumption), increasing debt burden and defaulting on repayment. Additionally, documentation requirements and bank capacity constraints limit card penetration in remote agricultural areas.