The government is implementing various schemes to support farmers, such as the PM Kisan and interest subsidy programs, among others. These initiatives aim to provide significant benefits to farmers. Additionally, farmers require financial assistance for agricultural activities like sowing crops, purchasing fertilizers, ensuring water supply, and maintaining the fields. Often, farmers resort to borrowing money from moneylenders or banks at high-interest rates. In such situations, due to crop failure or low yields, farmers often fall into a debt trap.
To address these challenges, the government introduced the Kisan Credit Card (KCC) loan scheme, designed to offer farmers low-interest loans by mortgaging their land. This scheme, also known as the Green Card scheme, was launched in 1998 by the Government of India in collaboration with the Reserve Bank of India (RBI) and NABARD. Under this scheme, farmers can visit their nearest bank, submit their land records, complete the necessary formalities, and avail loans for agricultural purposes.
Key Features of the Kisan Credit Card Scheme:
- Launch Year: 1998
- Eligibility: Any farmer in India can benefit from this scheme.
- Objective: To provide loans at low-interest rates to farmers.
- Loan Limit: Farmers can avail loans up to ₹3 lakh at an interest rate of 4%. If the loan exceeds ₹3 lakh, the interest rate increases.
Interest Rates Under the KCC Scheme:
The total interest rate for loans under the KCC scheme is 9%. However, the central government provides a 2% subsidy on this rate. Additionally, if the farmer repays the loan within one year, they receive a 3% rebate. Thus, the effective interest rate is reduced to just 4%. This makes it one of the most affordable loan schemes available for farmers in India
How to Apply for a Kisan Credit Card:
- Visit the nearest public sector bank and inquire about the KCC scheme.
- Eligible farmers can apply for the Kisan Credit Card and receive a passbook.
- The passbook will contain details such as the farmer’s name, address, landholding, loan limit, validity period, and a passport-sized photograph. This passbook serves as both an identification document and a record of transactions.
By implementing this scheme, the government aims to reduce farmers’ financial burden and help them avoid falling into high-interest debt cycles.