KCC Scheme: Government is giving a loan of ₹ 5 lakh at 4% interest, know how to take advantage of this scheme
Kisan Credit Card: Under the government’s Kisan Credit Card scheme, farmers can now avail loans up to ₹5 lakh at just 4% annual interest. It covers every expense of farming with features like easy application, digital transactions and collateral-free limit. Know the complete process to avail this scheme.
Kisan Credit Card: Kisan Credit Card (KCC) scheme provides loans to crores of farmers of the country at a very cheap rate. Its purpose is to provide timely and easy loans to farmers for farming and related activities. Under this scheme, farmers can take loans for many things like short-term farming, post-harvest expenses, household needs, animal husbandry and farm repairs.
The government gives 2% interest subsidy and 3% timely payment bonus in this scheme, so that the farmer can get a loan at only 4% annual interest rate. This is one of the cheapest agricultural loans available in the country. Let us know what is KCC card, how does it work and how farmers can take advantage of it?
What is Kisan Credit Card Scheme?
The Kisan Credit Card (KCC) scheme was started in 1998 with the intention of providing timely loans to farmers for farming and other needs. Through this, farmers can buy seeds, fertilizers and farming equipment, so that they do not have to take loans at high interest rates. This card also works like a debit card, through which farmers can withdraw money from ATMs.
According to government data, there are currently more than 7.75 crore active KCC accounts in India. In the last few years, the number of loan takers under this scheme has increased rapidly. While the total loan was ₹ 4.26 lakh crore in the year 2014, it has increased to ₹ 10.05 lakh crore by December 2024. It is clear from this that both the need and trust of KCC have increased among the farmers.
How much loan is available under KCC?
The loan limit available to the farmer under KCC depends on many things. Such as the scale of finance of the crop, the amount of land, the cost of cultivation, insurance expenses, and the estimate of maintenance of farm machines. On the basis of the loan limit fixed initially, a new limit is fixed by assuming a natural increase of up to 10% every year for the next five years.
Finance Minister Nirmala Sitharaman has increased the maximum loan limit under the KCC scheme from ₹ 3 lakh to ₹ 5 lakh in Budget 2025. A loan up to ₹2 lakh is completely collateral-free, meaning there is no need to pledge anything for it. However, for amounts above ₹2 lakh, banks may ask for collateral or other security as per their policy.
Why is the card limit divided into two parts?
This is because the interest rate, repayment terms and subsidy on short term loan (for crop) and term loan (such as tractor, irrigation) are different. Therefore, the bank divides the KCC limit into two parts, one short term loan, the other term loan. This not only provides convenience to the farmer, but also makes accounting easy for the bank.
How does the KCC card work?
This card provides a kind of multipurpose digital debit card to the farmers from the bank. With this, farmers can withdraw money or make purchases from ATM, Bank Mitra, mobile app or PoS machine of fish seed/seed-fertilizer seller. The card can also be linked to Aadhaar or biometric identity, so that its use is safe and easy.
Where can transactions be done with the card?
With this card, farmers can do ATM, Bank Mitra (BC), mobile banking and Aadhaar based transactions. With this, farmers do not have to waste time in bank queues and they can buy the necessary goods directly from their farms.
Who can apply for KCC?
- Land owning farmers (individual or joint names)
- Sharecroppers, tenant farmers and oral lease holders
- Farmer groups like SHG (Self Help Group) or JLG (Joint Liability Group)
Online process of applying for KCC
- Visit the website of the bank from which you want to get KCC.
- Choose the Kisan Credit Card option.
- Click on ‘Apply’.
- Fill the required information and submit.
- You will get an application number, and the bank will contact you within 3-4 days.
Whereas, for offline application, the farmer has to go to his nearest bank branch and fill the form. After this, the bank officer will do the necessary investigation and approve the KCC card based on your eligibility.
What documents are required?
- Filled application form
- Proof of identity and residence (such as Aadhaar, driving license)
- Passport size photo
- Proof of land ownership
- Crop pattern details
- If loan amount is more than ₹1.60 lakh, mortgage or guarantee documents
Kisan Credit Card Yojana is a powerful way to provide financial support to farmers for every aspect of farming. It has low interest, simple process and digital linkage with the bank. For small and marginal farmers, this scheme not only makes farming easier, but also helps them towards becoming self-reliant.
The post KCC Scheme: Government is giving a loan of ₹ 5 lakh at 4% interest, know how to take advantage of this scheme first appeared on informalnewz.
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