KCC: Under this government scheme, you can get a loan of ₹5 lakh, that too at just 4% interest..

Under the Kisan Credit Card (KCC) scheme of the Government of India, now a loan of up to ₹ 5 lakh is available at an affordable interest rate of 4%. This scheme provides easy and cheap loans to farmers for farming, animal husbandry, and other needs. The government gives 2% interest subsidy and 3% timely payment bonus, so that farmers have to pay only 4% annual interest. This is the cheapest agricultural loan in the country. So let's know what KCC is, how it works, and how farmers can take advantage of it.

KCC is a true companion of farmers

The Kisan Credit Card Scheme was started in 1998. Its purpose was to give 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, with 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, loans worth ₹4.26 lakh crore were 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 the maintenance of machines used in the fields. The loan limit is fixed initially and increases by 10% every year, which lasts for the next five years.

Finance Minister Nirmala Sitharaman increased the maximum limit of KCC loan from ₹3 lakh to ₹5 lakh in the 2025 budget. The special thing is that a loan of up to ₹2 lakh is available completely without collateral. That is, you do not need to mortgage anything. But on loans above ₹2 lakh, the bank can ask for collateral as per its policies.

KCC loan is divided into two parts: short-term and long-term loans. A short-term loan is for crops, like buying seeds and fertilizers. Whereas, a term loan is for the long term, like buying a tractor or installing an irrigation system. Both have different interest terms. This makes it easier for farmers to take and repay the loan, and the accounts of banks also remain clear.

How does the KCC card work?

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

Where can KCC be used?

With this card, farmers can transact at many places. Be it ATM, Bank Mitra, mobile banking, or Aadhaar based transaction, KCC is useful everywhere. This saves farmers from standing in long queues of the bank. They can buy essential commodities from their farm itself, that too without any hassle. KCC scheme is a boon for farmers. With affordable interest rates, easy loan process and digital facilities, this scheme makes the lives of farmers easier.

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