Micro Financing and Kisan Credit Card (KCC)

The Kisan Credit Card (KCC) was introduced by the Government of India in 1998-99 with the goal of providing farmers with timely and adequate credit to meet their short-term production needs. The scheme was designed by NABARD (National Bank for Agriculture and Rural Development) to support the cultivation of crops, purchase of agricultural inputs, and other farming expenses.

Key Features of KCC:

Credit Card-Cum-Passbook:

• • Farmers are issued a Kisan Credit Card along with a passbook, which serves as both an identity card and a means of facilitating financial transactions.
  • The passbook contains the farmer’s name, address, landholding details, borrowing limit, and validity period.

Credit Limit:

• • The credit limit is determined based on factors such as operational landholding, cropping pattern, and the scale of finance recommended by the District Level Technical Committee (DLTC) or State Level Technical Committee (SLTC).

Validity and Review:

• • KCC is typically valid for three years, after which it is subject to an annual review.
  • If the card remains inactive for two consecutive crop seasons, it is classified as a non-performing asset (NPA).

Interest Subvention and Incentives:

• • The Government of India offers an interest subvention of 2% and a Prompt Repayment Incentive (PRI) of 3%, making the credit available at a subsidized interest rate of 4% per annum.

Objectives/Purpose of KCC:

The KCC aims to provide adequate and timely credit support to farmers for their short-term financial needs, with the following purposes:

1. To meet the short-term credit requirements for the cultivation of crops.
2. Post-harvest expenses: Covering costs after crop harvesting.
3. Produce marketing loans: Helping farmers market their produce.
4. Consumption requirements of the farmer’s household.
5. Working capital for maintaining farm assets and allied activities.
6. Investment credit for agriculture and allied sectors.

Eligibility Criteria for KCC:

The following categories of farmers are eligible for the Kisan Credit Card:

1. Individual/joint borrowers who are owner-cultivators.
2. Tenant farmers, oral lessees, and sharecroppers.
3. Self-Help Groups (SHGs) or Joint Liability Groups (JLGs), including tenant farmers and sharecroppers.

Application Procedure:

Online Application:

1. Visit the website of the bank you wish to apply to for the KCC scheme.
2. Select the Kisan Credit Card option and click on ‘Apply’.
3. Fill out the application form with the required details and submit it.
4. Upon submission, you will receive an application reference number. If eligible, the bank will contact you within 3-4 working days for the next steps.

Offline Application:

1. Visit the branch of the bank you wish to apply to.
2. Download the KCC application form from the bank’s website or complete the application at the branch with the assistance of a bank representative.

Documents Required for KCC Application:

• Application Form.
• Two Passport-size photographs.
• ID Proof (such as Aadhar Card, Voter Identity Card, Passport, or Driving License).
• Proof of landholding (certified by revenue authorities).
• Cropping pattern and acreage (details of crops grown).
• Security documents (for loan limits above ₹1.60 lakh or ₹3.00 lakh, as applicable).
• Any other documents as specified by the bank for loan sanction.

The KCC scheme is a significant tool for farmers, offering them an efficient and affordable credit option to meet their agricultural needs. By providing easy access to credit, the scheme aims to improve agricultural productivity and the financial well-being of farmers.