Kisan credit card (kcc) scheme
- Introduced: 1998-99
- Designed by: NABARD
- Objective: To provide timely and adequate short-term credit for farmers’ production needs.
Features
- Provides revolving cash credit for 3 years.
- Simplifies disbursement and repayment.
- Insurance coverage included (personal accident insurance).
- Farmers can withdraw using a credit card / ATM linked to the KCC account.
Microfinance & SHGS
- Self Help Group (SHG): Small group (10–20 members) that saves and lends among members.
- SHG-Bank Linkage Programme: Started by NABARD in 1992.
- Promotes financial inclusion and women empowerment.
Agricultural credit policy committees
|
Committee |
Year |
Major Recommendations |
|
All India Rural Credit Survey Committee (AIRCSC) |
1954 |
Integrated credit system and creation of State Bank of India. |
|
Venkatappiah Committee |
1969 |
Strengthening cooperative credit structure. |
|
Narasimham Committee |
1975 |
Establishment of RRBs. |
|
Chakravarty Committee |
1985 |
Priority sector lending system. |
|
Khusro Committee |
1989 |
Strengthening agricultural credit institutions. |
|
R. V. Gupta Committee |
1998 |
Microfinance and SHG linkages. |
Agricultural credit agencies
|
Institution |
Year of Establishment |
Role |
|
State Bank of India (SBI) |
1955 |
First major bank to provide rural finance. |
|
Agricultural Refinance and Development Corporation (ARDC) |
1963 |
Provided refinance to banks for agricultural lending (later merged with NABARD). |
|
NABARD |
1982 |
Apex body for agricultural credit and rural development. |
|
RRBs |
1975 |
Local level banking for small farmers and artisans. |
|
Land Development Banks (LDBs) |
1920s |
Long-term agricultural loans. |
|
PACS |
1904 |
Village-level short-term credit providers. |
Principles of agricultural credit
- Safety: Loans must be secure and repayable.
- Liquidity: Banks should maintain liquidity to meet withdrawal demands.
- Profitability: Lending institutions should earn reasonable returns.
- Purpose: Credit should be used productively.
- Diversification: Loans should be diversified to avoid risk.
Credit worthiness of farmer
Depends on:
- Character
- Capacity to repay
- Capital position
- Commonsens
- Conditions of economy (known as the 5 Cs of Credit).
Problems in agricultural finance
- Inadequate institutional credit.
- Delay in loan disbursement.
- Lack of awareness and literacy.
- Improper utilization of loans.
- Overdependence on moneylenders in some regions.
Measures to improve agricultural finance
- Expansion of cooperative and commercial bank networks.
- Simplification of loan procedures.
- Credit guarantee and insurance schemes.
- Use of technology (KCC, RuPay cards, online banking).
- Linking SHGs and Joint Liability Groups (JLGs) with banks.
