Kisan Credit Card (KCC)

Introduction 

The Kisan Credit Card (KCC) is an agricultural credit scheme introduced by the Government of India in 1998 to simplify access to timely and affordable credit for farmers across the country. Designed to address the problem of complex loan procedures and costly informal borrowing, the KCC allows cultivators, Self Help Groups (SHGs), Farmer Producer Organisations (FPOs), and agri-entrepreneurs to obtain hassle-free short-term loans for crop production and related expenses. With a KCC, eligible farmers in India or any state can meet input costs – like seeds, fertilisers, and labour – without relying on moneylenders or facing cash flow shortages. The scheme also supports allied activities such as dairy, fisheries, and animal husbandry, making agriculture more sustainable and inclusive. Application for a Kisan Credit Card is open to individuals actively engaged in farming and allied services, ensuring financial inclusion and security for the rural community. The KCC scheme reflects India’s policy commitment to rural welfare and food security through accessible formal credit. Overall, the Kisan Credit Card benefits millions by making agricultural finance simpler, faster, and more reliable for farmers nationwide.

Overview of the Scheme

The Kisan Credit Card (KCC) scheme was launched by the Ministry of Finance, Government of India at the central level. The scheme is implemented with support from the Department of Financial Services, the Department of Agriculture & Farmers Welfare (DA&FW), and is operational nationwide. All scheduled commercial banks, regional rural banks, and cooperative banks are responsible for issuing KCCs to eligible farmers.

Implementing Agencies

• Primary implementation: Department of Financial Services and Department of Agriculture & Farmers Welfare (central level).
• Banking partners: Public and private sector banks, cooperative banks, and regional rural banks handle the on-ground application, issuance, and servicing of KCC loans.
• States assist by coordinating with bank branches for outreach and verification.

Funding Pattern

• The KCC scheme is 100% centrally funded; all credit risk and interest subvention costs are borne by the Government of India, making it a centrally sponsored scheme. The interest subsidy supports lower interest rates for farmers availing KCC loans.

Sectors and Components Covered

The KCC provides credit mainly for the following:

• Crop production needs (seed, fertilisers, pesticides, irrigation)
• Farm machinery and equipment
• Allied activities like animal husbandry, dairy, and fisheries
• Post-harvest expenses and marketing
• Working capital for maintenance of farm assets
• Crop insurance is linked for additional risk protection

Example: A small wheat farmer uses their Kisan Credit Card to buy seeds and pay for tractor rental during the planting season, and also covers insurance for crop loss due to floods.

Current Status

• The KCC scheme is ongoing and has been revised multiple times for wider coverage, including allied activities (last major revision in 2019).
• The government regularly pushes to increase KCC penetration and ease digital application, aiming to ensure every eligible farmer and allied sector worker benefits from formal credit.

Objectives 

The objectives of the Kisan Credit Card (KCC) scheme highlight its role in making rural credit easier, faster, and safer for India’s farming community. This agriculture scheme is designed to address multiple challenges around affordable finance, seasonal working capital needs, and coverage for allied sectors like dairy and fisheries. The goals are rooted in securing the financial welfare and productivity of cultivators, promoting formal banking, and supporting Indian agriculture’s growth in an inclusive manner.

• Increase rapid access to affordable working capital for crop production and allied activities.
• Support flexible, easy withdrawal and repayment facilities for farmers throughout the cropping cycle.
• Promote wider financial inclusion of rural households by linking them to formal banking through Kisan Credit Card (KCC).
• Enable farmers to purchase essential inputs like seeds, fertilisers, pesticides, and hire machinery as needed.
• Protect farming families by integrating crop insurance and risk safeguards with KCC-linked loans.
• Simplify the credit process by streamlining documentation and reducing procedural delays.
• Encourage entrepreneurship by providing credit to Self Help Groups (SHGs) and Farmer Producer Organisations (FPOs) within agriculture.
• Provide coverage for post-harvest costs, market linkages, and storage-related expenses.
• Promote sustainable agricultural practices through timely financial support and policy alignment.
• Strengthen the overall productivity and resilience of India’s agriculture sector via dependable farm credit.

Key Features / Benefits 

The Kisan Credit Card (KCC) scheme offers Indian farmers a set of features and benefits that make agricultural credit easy, flexible, and secure. Its main goal is to give cultivators and allied workers much-needed financial support for all important farming activities, through a single, simple card. Here are its key features and benefits explained in practical terms.

• Low Interest Rate on Loans

KCC loans typically have low interest rates (7% per year for short-term crop loans), making borrowing more affordable for small and marginal farmers.

• Interest Subsidy and Timely Repayment Incentive

Farmers get an interest subvention (subsidy) from the government – 2% of the loan amount – and a 3% extra interest benefit if the loan is repaid on time. (Example: Pay on time and repay just 4–5% interest total).

• Flexible Credit Limit

Credit limits are based on cropping pattern and farm size, so each farmer gets as much credit as needed – up to ₹3 lakh for most.

• No Collateral for Small Loans

No security or collateral is needed for loans up to ₹1.6 lakh (and in some tie-up cases, up to ₹3 lakh).

• Covers Allied Activities

Funds can be used not just for crops, but for allied activities – livestock, poultry, fisheries, dairy, and others (Example: Use a KCC to buy cow feed, rent fishery gear, or buy chicks).

• Wide Expense Coverage

KCC funds cover all needs: seeds, fertilisers, irrigation, machinery, harvesting, post-harvest, storage, and transport (Example: Buy seed, hire a tractor, and pay for irrigation – all on one card).

• Cash Withdrawal and RuPay Card

Farmers get a RuPay ATM/debit card to withdraw cash from ATMs or banks as needed for daily expenses.

• Quick, One-Time Application

The application process is streamlined (one form, basic documents), and after approval, farmers do not need to re-apply for every season.

• Multiple Year Validity

A KCC is usually valid for up to five years, covering several crop seasons before renewal is needed.

• Insurance Coverage

Borrowers are eligible for crop insurance, and some get personal accident insurance up to ₹50,000 in the event of accidental death or disability (Example: The policy protects the family if the farmer meets with an accident).

• Working Capital for Maintenance

Funds can also be used to maintain or repair farm assets and buy small equipment, with easy repayment aligned to harvest cycles.

• Open to SHGs, Tenant Farmers, and Others

Eligibility includes not just landowners but also self-help groups, tenant farmers, sharecroppers, and oral lessees, expanding benefits to the most vulnerable rural workers.

Eligibility Criteria 

The eligibility criteria for the Kisan Credit Card (KCC) scheme vary based on the type of beneficiary, ensuring that farmers and allied groups receive appropriate financial support. This section explains who can apply, what documents are needed, and special conditions aimed at widening access while maintaining clarity.

Farmers

• Individuals or Joint Farmers: Must be Indian citizens engaged in farming. Both individual landholders and joint cultivators (up to 5 persons) are eligible.
• Age Criteria: Applicants should be at least 18 years old and not older than 75 years at the loan’s end. Farmers over 60 need a co-borrower who is a legal heir or immediate family member under 60.
• Land Status: Eligibility includes owner cultivators, tenant farmers, oral lessees, and sharecroppers.

Self-Help Groups (SHGs)

• Must be registered and active.
• Should maintain a link with banks for credit and repayment operations.

Farmer Producer Organisations (FPOs)

• Registered under the Producer Companies Act or relevant law.
• Should have a minimum number of members (usually specified by banks or government rules).
• Must be operational and engaged in farming activities or allied sectors.

Entrepreneurs/Startups/MSMEs

• Should provide proper registration such as UDYAM or GST certificates when applicable.
• Engaged in agriculture-related enterprises qualifying under scheme norms.

Special Categories

• Women farmers, Scheduled Castes/Scheduled Tribes, and farmers in North-Eastern or Himalayan regions may have access to specific benefits or relaxed conditions as per government rules.

Not Eligible

• Those engaged exclusively in non-agricultural activities.
• Individuals who already receive duplicate benefits under other agricultural credit schemes without proper justification.

Mandatory Documents

• Identity Proof: Aadhaar Card, PAN, Voter ID, Passport, or government-approved ID.
• Address Proof: Aadhaar, passport, utility bills (not older than 3 months), or similar.
• Land Records: Ownership or tenancy proof.
• Bank Documents: Passbook or bank statements.
• Registration Certificates: For SHGs, FPOs, entrepreneurs.
• Additional documents like detailed project reports or quotations may be required for higher loan amounts.

Application Process

Where to Apply

Farmers can apply either online through the official portal www.pmkisan.gov.in or at their nearest bank branch, cooperative society, or designated government offices like Krishi Vigyan Kendras (KVKs) or block offices.

Registration/Login Steps

For online applications, farmers must first register on the PM Kisan portal by creating a login ID using Aadhaar number, mobile number, and bank details. Existing users can directly log in using their credentials.

Fill Application Form

The online application form has several sections:

• Beneficiary details (name, age, Aadhaar, income details).
• Land and farm details (survey number, landholding size).
• Loan component selection (crop, allied sector).
• Bank details (account number, IFSC code).

Documents to Upload/Submit

Applicants need to upload or submit:

• Aadhaar card and bank passbook.
• Land records and crop details.
• Registration certificates for organizations (if applicable).
• Other proofs like DPR, quotations (if applying for machinery or equipment support).

Application Fee

There is no application fee for the KCC scheme; it is entirely free to apply.

Acknowledgment/Application ID

After submitting the form, applicants receive an acknowledgment with a unique application ID, which should be kept safe for tracking purposes.

Verification and Inspection

Banks or authorities may verify details through field visits or document checks, especially for new applicants or major loan amounts.

Approval and Disbursement

Once verified, the bank approves the application, usually within a few weeks. Loan amount is disbursed via direct benefit transfer to the farmer’s linked bank account.

Tips

• Always double-check that your name, Aadhaar, land records, and bank details match across documents to avoid delays.
• Upload clear, legible copies of all required documents.
• Submit your application before deadlines to ensure timely processing.
• Visit the nearest banking or government office if you face technical or document-related issues.
• Keep a copy of your application receipt or acknowledgment ID for future reference.

Challenges or Limitations 

The Kisan Credit Card (KCC) scheme has greatly helped Indian farmers, but it still faces some challenges and limitations that affect its smooth operation and full potential. Understanding these common issues along with practical solutions can help farmers and officials make the best use of the scheme’s benefits.

Challenge: Delayed Loan Disbursement

Farmers often experience delays in receiving loans, which affects timely crop operations.

→ What to do: Submit all documents early and keep contact with the bank to track application status. Visit branch officials if delays continue.

Challenge: Inadequate Credit Limits

At times, the sanctioned loan amount may not be sufficient to cover all farming needs.

→ What to do: Clearly document all input costs and allied activities during application to justify a higher credit limit.

Challenge: Cumbersome Verification Procedures

Lengthy field inspections and multiple document checks can slow approvals.

→ What to do: Keep accurate, updated land records and identity documents ready to speed up verification.

Challenge: Mandatory Crop Insurance Burden

Some farmers feel the compulsory linked crop insurance adds financial pressure.

→ What to do: Understand insurance benefits fully and consult bank officers on cost-effective insurance options.

Challenge: High Effective Interest Rates for Late Repayments

Delays in repayment may result in higher interest, creating repayment difficulty.

→ What to do: Plan timely repayments aligned with harvest cycles and use bank reminders if available.

Challenge: Limited Awareness and Outreach

Some regions have low awareness or poor access to KCC due to lack of banking outreach.

→ What to do: Seek help from local agricultural offices or Krishi Vigyan Kendras (KVKs) for application guidance.

Challenge: Document Mismatches and Errors

Errors or inconsistencies in documents can cause rejection or delays.

→ What to do: Double-check all submitted information and correct mismatches before submission.

Challenge: Seasonal Application Window

KCC processing often follows cropping seasons, so applying at the wrong time can delay support.

→ What to do: Apply well before the cropping season begins and enquire locally about the best timing.

Government Support & Future Outlook 

The Kisan Credit Card (KCC) scheme has strong linkages and convergence with several flagship agricultural missions of the Government of India, enhancing its impact on farmers and Farmer Producer Organisations (FPOs). This integration helps streamline credit, insurance, and value addition services under one umbrella, simplifying access for farmers.

KCC works closely with schemes like PM-KISAN, which offers direct income support to farmers, and Pradhan Mantri Fasal Bima Yojana (PMFBY), which provides crop insurance linked to crop loans under the KCC. By combining these, a farmer can receive credit for inputs, insurance protection against crop loss, and income support all at once. Similarly, KCC complements PMFME (Prime Minister’s Formalisation of Micro food processing Enterprises), supporting FPOs in adding value through processing and marketing with financial assistance.

The government’s 2023 initiative, Ghar Ghar KCC Abhiyaan, aims for universal coverage ensuring every eligible farmer gets a KCC. The Kisan Rin Portal (KRP) helps integrate data from various schemes, improving coordination between banks, insurance agencies, and farmers for faster service delivery and transparency.

In the road ahead, combining KCC with missions like PMFBY, ATMA, and NFSM provides seamless support to farmers, reducing risks and improving productivity. For example, a farmer can use a KCC loan to buy seeds, ensure the crop is insured via PMFBY, and receive income support through PM-KISAN – all coordinated through linked digital platforms.

Conclusion 

The Kisan Credit Card (KCC) scheme remains a vital tool for empowering India’s farming community by providing timely and affordable credit for agricultural and allied activities. It benefits a wide range of farmers including small, marginal, tenant farmers, SHGs, and Farmer Producer Organizations. The scheme’s flexibility in credit limits, low-interest subsidized loans, and inclusion of allied sectors make it essential for sustaining and enhancing farm productivity. To take advantage of these benefits, interested individuals should check their eligibility and apply through the official PM Kisan Portal or their local bank branch while preparing necessary documents in advance. It is important to verify the latest scheme details and updates on official government websites or helplines before applying.

Explore detailed resources on this scheme and the full suite of programmes at ALL ABOUT AGRICULTURE. For one-on-one assistance, call us at +91 8484002628.