The Kisan Finance Card plan is a government of India initiative that gives farmers access to credit on a timely basis. NABARD introduced the KCC (Kisan Credit Card) initiative in 1998 with the goal of providing farmers with short-term formal credit (National Bank for Agriculture and Rural Development).
The KCC plan was created to guarantee that farmers in the agricultural, fishery, and animal husbandry sectors have access to loans. This was accomplished by assisting them in obtaining short-term loans and providing them with a credit limit for the purchase of equipment as well as other costs.
Furthermore, farmers who use KCC are protected from the exorbitant interest rates charged by banks on conventional loans because the interest is paid by KCC.
Objectives of the Kisan Credit Card Scheme
- To assist with post-harvest expenses.
- To provide operating capital for the maintenance of farm assets and agricultural activities.
- Agriculture and allied industries require loans for capital expenditures (land development, pump sets, etc.).
- Planting, drip watering, and so on.)
- Meet the needs of farmers in terms of consumption.
- To provide sufficient and timely financing to farmers through the banking system at a moderate rate of interest.
- Being able to provide credit when it is required.
Eligibility Criteria for Kisan Credit Card Loan Scheme
The following are the KCC scheme’s eligibility requirements:
- Any farmer who cultivates his or her own land.
- People who are joint debtors and belong to a group. Owner-cultivators must make up the majority of the group.
- The KCC is open to sharecroppers, tenant farmers, and oral lessees.
- Sharecroppers, farmers, tenant farmers, and others form self-help groups (SHGs) or joint liability groups (JLGs).
- Farmers engaged in crop cultivation or related activities such as animal husbandry, as well as non-farm occupations like fishing.
Interest and Other Charges on Kisan Credit Cards
The interest rate on the KCC, as well as its credit limit, varies from one bank to the next. KCC’s interest rate, on the other hand, might be as low as 2% and as high as 4%.
In addition, the government provides specific interest rate subsidies and programmes to farmers. These would be determined by the cardholder’s payback history and overall credit history.
Other costs and expenses, such as processing fees, insurance premiums (if applicable), land mortgage deed charges, and so on, will be determined at the issuing bank’s discretion.
Features of the Kisan Credit Card Scheme:
- Various requirements of farmers are addressed under this plan, including cultivation/production demands, post-harvest costs, working capital for farm asset upkeep, and the purchase of agricultural supplies such as pesticides, seeds, fertilisers, and so on.
- The KCC Scheme uses a fully hassle-free approach for disbursing loans, as well as very low interest rates.
- The procedures are normally carried out through the issuing branch under the KCC Scheme.
- In the case of cooperative banks, the issuing branch can also be ‘Primary Agricultural Credit Societies’ or through other branches at the discretion of the main bank.
- Crop loans made via the KCC Scheme for designated crops will be covered by the Crop Insurance Scheme as well.
- This is done to safeguard farmers’ interests in the event of agricultural damage due to natural disasters, insect assaults, and other factors.
- The KCC Scheme also protects cardholders from death or permanent disability as a result of an accident.
Disbursement and Repayment Period under the Kisan Credit Card Scheme
- The loan will be deposited to the farmers’ account for a three-year period, with easy payback when the harvest season is finished. The Credit Card plan offers a revolving cash credit facility that allows for a limited number of withdrawals and repayments.
- The Kisan Credit Card system provides a variety of benefits to farmers.
- A farmer’s eligibility for these incentives is determined by his or her repayment history.
- Fees and costs such as processing fees, land mortgage fees, deed fees, and so on will be waived.
- The issuing bank sets the fees, but they are maintained low to attract a wide number of people.
Individual and communal farmers and fish farmers, marine fishermen, poultry or small ruminant owners, dairy farmers, and women organisations can apply for the Kisan Credit Card. It is a realistic alternative for everyone because of its wide popularity and borrower-friendly conditions.