KCC: Farmers are happy, the government is giving a loan of Rs 5 lakh at just 4% interest..

The Government of India's Kisan Credit Card (KCC) scheme is now providing loans up to ₹ 5 lakh to farmers at an affordable interest rate of just 4%. This scheme provides easy and cheap loans for farming, animal husbandry, and other agriculture-related needs.

With the government providing 2% interest subsidy and 3% timely payment bonus, farmers effectively have to pay only 4% annual interest, making it the cheapest agricultural loan in the country. So let's know in the news below what KCC is, how it works, and how farmers can take advantage of it. (Government scheme)

KCC is a true companion of farmers-

The Kisan Credit Card Scheme was started in 1998. Its purpose was to provide timely loans to farmers for farming and related work. With this card, farmers can buy seeds, fertilizers, pesticides, and farming tools without getting into the clutches of moneylenders. Not only this, but this card also works like a debit card, through which farmers can withdraw money from an ATM or buy essential goods.

According to government figures, there are more than 7.75 crore active KCC accounts in the country. While in 2014, a loan of ₹ 4.26 lakh crore was distributed under KCC, by December 2024, this figure reached ₹ 10.05 lakh crore. It is clear that the trust of farmers in this scheme has increased, and so has the need.

How much loan will be available from KCC?
The loan amount under KCC depends on many things, such as crop expenses, the size of the land, insurance cost, and maintenance of the machines used in the fields. The loan limit fixed initially increases by 10% every year, which lasts for the next five years.

Finance Minister Nirmala Sitharaman has increased the maximum limit of Kisan Credit Card (KCC) loan from ₹ 3 lakh to ₹ 5 lakh in the 2025 budget. This is a big relief for farmers. The specialty of this scheme is that loans up to ₹ 2 lakh will be available completely without any collateral. This means that farmers will not need to mortgage anything to take a loan of up to ₹ 2 lakh. However, for loans above ₹ 2 lakh, banks may demand collateral as per their policies.

There are two types of Kisan Credit Card (KCC) loans: short-term and term loans. Short-term loans are used for crop-related expenses like seeds and fertilizers, while term loans are for long-term investments like buying tractors or irrigation systems. Both have different interest rates, which is convenient for farmers and makes it easier for banks to keep records.

How does a KCC card work?

The KCC card is like a multipurpose digital debit card. Through this, farmers can withdraw money or make purchases from an ATM, Bank Mitra, mobile app, or PoS machine of seed and fertilizer sellers. The card can be linked to Aadhaar or biometric identity, so that the transaction is safe and easy.

Where can KCC be used?

Kisan Credit Card (KCC) is a boon for farmers. It enables them to make financial transactions on various platforms, including ATM, Bank Mitra, mobile banking, and Aadhaar-based transactions. KCC saves farmers from long bank queues, allowing them to easily buy essential agricultural goods from their farms. This scheme simplifies the lives of farmers through affordable interest rates, simple loan processes and digital facilities.

Disclaimer: This content has been sourced and edited from Hr Breaking. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.