Kisan Credit Card: a Farmer-friendly scheme

Kisan Credit Card Scheme

Kisan Credit Card scheme (KCC) is a short term loan scheme for farmers in India. The central government provides an adequate short-term affordable credit to farmers in a hassle free manner. This scheme particularly provides the farmers adequate, timely and cost-effective credit from banks for their farming needs.  It was launched in 1998 and has since provided farmers with ample amount of short-term loans.

Objective:   

• To give financial support to farmers across India.
• To help farmers with incomes especially during disaster times.
• To provide farmers with Personal Accidental Insurance Scheme (PAIS) in case of personal deaths/disaster.
• Farmers can obtain inputs as well as can take out cash for their inputs also.

Financial benefits:

Farmers would be provided with a credit card and pass book with name, address, particulars of landholding, duration of validity, borrowing limit, passport size photograph of the borrower etc. The borrower needs to produce this card whenever any transaction happens.

Insurance:

• This scheme provides Rs. 50,000/- coverage for death due to accident with 12 months of the accident.
• 50,000/- coverage for permanent total disability or loss of two limbs/two eyes
• 25,000/- coverage for one limb/one eye
• No processing fee for up to R 3lakh
• There is no need to withdraw any money for one year to keep it valid.
• Land is required as a collateral security for loan above Rs. 1 lakh.

Under KCC, farmers can withdraw the loan amount in the form of cash. KCC holders who have a credit limit of Rs. 25,000/- can also avail cheque books as well.

Interest rate:

KCC interest rate varies from bank to bank however; naturally the applicable interest rate annually is 9% for a credit limit of maximum Rs. 3 lakh. An additional interest subsidy of 2% is provided to a farmer with a good track record for three consecutive years.

Duration:

The KCC is valid for up to 5 years and is issued through RuPay Debit mode.

Eligibility Criteria:

• Any farmer can be a borrower only if he/she is the owner cultivator.
• Self-help Groups or Joint Liability Groups of farmers are also eligible
• Tenant farmers and Share Croppers etc.
• Farmers who are having production credit of Rs. 5,000/-

How to avail:

All the commercial banks like, Regional Rural Banks (RRBs) and co-operative banks are eligible to provide KCC. Private Banks like ICICI, Axis also provide KCC. Contact the respective banks to avail loans.

For more information, Vikaspedia

Source: Nabard , Bankbazaar