KCC Update: The government has made fun, now you can get a loan of Rs 5 lakh at just 4 percent interest..

Kisan Credit Card: The Kisan Credit Card (KCC) scheme provides loans to crores of farmers at a very cheap rate. Its main goal is to provide timely and easy installment loans to farmers for farming and related activities. With this scheme, farmers can take loans for various purposes like short-term farming expenses, post-harvest expenses, household needs, animal husbandry, and farm maintenance.

The government gives a two percent interest subsidy and a three percent timely payment bonus in this scheme, so that the farmer can get a loan at an interest rate of only four percent per annum. It is one of the cheapest agricultural loans available in the country. Let us know in the news below what the KCC card is, how it works, and how farmers can take advantage of it.

What is the Kisan Credit Card Scheme?

The Kisan Credit Card (KCC) scheme was launched in 1998 to provide timely loans to farmers for farming and other needs. This scheme helps farmers to buy seeds, fertilizers, and farming equipment, so that they can avoid high-interest loans. KCC also works like a debit card, from which farmers can withdraw money from an ATM.

According to government data, there are currently more than 7.75 crore active KCC accounts in India. In the last few years, the number of loan takers under this scheme has increased rapidly. While the total loan was Rs 4.26 lakh crore in the year 2014, it has increased to Rs 10.05 lakh crore by December 2024. It is clear from this that both the need and trust of KCC have increased among the farmers.

How much loan is available under KCC?

The loan limit available to the farmer under KCC depends on many things. Such as the scale of finance of the crop, amount of land, cost of cultivation, insurance expense, and estimate of maintenance of farm machines. Based on the loan limit fixed initially, a new limit is set assuming a natural increase of up to 10 percent every year for the next five years.

Finance Minister Nirmala Sitharaman has increased the maximum loan limit under the KCC scheme from Rs 3 lakh to Rs 5 lakh in Budget 2025. A loan up to Rs 2 lakh is completely collateral-free; that is, there is no need to mortgage anything for it. At the same time, for an amount above Rs 2 lakh, banks can ask for collateral or other security as per their policy.

Why is the card limit divided into two parts?

The reason for this is that the interest rate, repayment terms, and subsidy on short-term loans (for crop) and term loans (such as tractors, irrigation) are different. Therefore, the bank divides the KCC limit into two parts: one short-term loan and the other a term loan. This not only facilitates the farmer but also makes accounting easy for the bank.

How does the KCC card work?

The bank is now providing a multipurpose digital debit card to farmers. Farmers can easily withdraw or spend money through an ATM, Bank Mitra, Mobile App, or PoS machine. This card can also be linked to Aadhaar or biometric identity, making it safe and easy to use.

Where can transactions be done with the card?

With this card, farmers can do ATM, Bank Mitra (BC), mobile banking, and Aadhaar-based transactions. With this, farmers do not have to waste time in the bank queue, and they can buy the necessary goods directly from their farm.

Who can apply for KCC?

Land owning farmers (individual or in joint names)

Sharecroppers, tenant farmers, and oral lease holders

Farmer groups such as SHG (Self-Help Group) or JLG (Joint Liability Group)

Online process of applying for KCC

Go to the website of the bank from which you want to get KCC.

Choose the Kisan Credit Card option.

Click on ‘Apply’.

Fill in the required information and submit.

You will get the application number, and the bank will contact you in 3-4 days.

On the other hand, for an offline application, the farmer has to go to his nearest bank branch and fill out the form. After this, the bank officials will do the necessary investigation and approve the KCC card based on your eligibility.

What documents are required?

Filled application form

Identity and residence proof (like Aadhaar, driving license)

Passport-size photo

Proof of land ownership

Details of crop pattern

If the loan amount is more than ₹1.60 lakh, then mortgage or guarantee documents-

The Kisan Credit Card (KCC) scheme provides financial assistance to farmers for all their farming needs at affordable interest rates. Its simple application process and digital linkage with banks make it easier for farmers. This scheme especially empowers small and marginal farmers, helping them to become self-reliant and run their agricultural activities smoothly.

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.