Agriculture is the backbone of India’s economy. It is a sector that employs the majority of the population and contributes significantly to the country’s GDP. However, farmers often face financial challenges due to unpredictable weather, rising input costs, and other factors. To support the farming community, the government introduced the Kisan Credit Card (KCC) in 1998. In this article, we will discuss how the KCC works and its benefits to farmers.
Understanding Kisan Credit Card (KCC)
The Kisan Credit Card is a credit facility designed for farmers to help them meet their agricultural expenses. It is a smart card that provides credit facilities at a reasonable interest rate. The KCC is available to all farmers, including small and marginal farmers, sharecroppers, and tenant farmers. The card can be used to purchase inputs such as seeds, fertilizers, pesticides, and other agrochemicals.
Features of Kisan Credit Card (KCC)
Here are some of the features of the KCC:
Eligibility
All farmers who own cultivable land are eligible to apply for the KCC. The card can also be obtained by tenant farmers, sharecroppers, and oral lessees.
Credit limit
The Kisan Credit Card (KCC) credit limit is determined based on the farmer’s income, landholding, and cropping pattern. The limit is reviewed every five years and can be increased based on the farmer’s repayment history.
Interest rate
The interest rate on Kisan Credit Card (KCC) is very reasonable, and it varies from bank to bank. Typically, the interest rate ranges between 7% to 9%, which is much lower than the interest rates charged on other loans.
Tenure
The tenure of the Kisan Credit Card (KCC) is flexible and can range from 1 to 5 years. The repayment schedule is linked to the farmer’s crop cycle, which ensures that the repayment is convenient for the farmer.
Insurance cover
The Kisan Credit Card (KCC) provides insurance coverage to the farmer against natural calamities, accidents, and other unforeseen events. The farmer is not required to pay any premium for the insurance cover.
Benefits of Kisan Credit Card (KCC)
Here are some of the benefits of the KCC:
Access to credit
The KCC provides farmers with easy access to credit at a reasonable interest rate. This helps farmers meet their agricultural expenses without facing any financial challenges.
Timely availability of credit
The KCC ensures timely availability of credit to farmers, which is crucial for successful crop production. The credit is available at the beginning of the cropping season, which enables farmers to purchase inputs at the right time.
Reduced cost of credit
The KCC provides credit at a much lower interest rate than other loans, which reduces the cost of credit for farmers.
Convenience
The KCC is a single credit facility that meets all the farmer’s agricultural expenses. This makes it very convenient for farmers to manage their finances.
Conclusion
The Kisan Credit Card is a very beneficial credit facility for farmers. It provides them with easy access to credit at a reasonable interest rate and ensures timely availability of credit. The KCC also provides insurance coverage to farmers, which protects them against unforeseen events. Overall, the KCC is an excellent initiative by the government to support the farming community.
