When will farmers get loans up to ₹5 lakh on KCC? Finance Minister announced it in the budget

Kisan Credit Card: While presenting Budget 2025 on February 1, Finance Minister Nirmala Sitharaman announced an increase in the short-term loan limit for Kisan Credit Card (KCC) holders from ₹3 lakh to ₹5 lakh, which will benefit 7.75 crore farmers. This government order is likely to be implemented from the next financial year.

Interest subsidy will also be available

According to a Financial Express report, officials have stated that the Cabinet has approved the Interest Subvention Scheme for agricultural credit to meet the working capital needs of farmers. Under this scheme, farmers taking loans up to ₹3 lakh will get an interest subsidy of up to 1.5 percent.

The objective behind this is to ensure sufficient credit flow in the agriculture sector. An official told FE, "The Expenditure Finance Committee is considering the evaluation report for the Interest Subvention Scheme. We expect that the increase in short-term credit for KCC holders will be implemented from the next financial year."

Millions of farmers will benefit

However, sources said that currently, the average short-term credit flow for each KCC holder is approximately ₹1.6 lakh. This means that currently, each KCC holder takes an average loan of ₹1.6 lakh. There are currently 7.71 crore active KCCs in the country, including farmers involved in fisheries and animal husbandry. In addition, since January last year, the RBI has also increased the limit for collateral-free loans under KCC from ₹1.6 lakh to ₹2 lakh. Finance Minister Nirmala Sitharaman, in her 2025-26 budget speech, stated, "The KCC provides short-term loans to 77 million farmers, fishermen, and dairy farmers. Under the Modified Interest Subvention Scheme (MISS), the loan limit through KCC will be increased from ₹3 lakh to ₹5 lakh."

Under the Ministry of Agriculture's Modified Interest Subvention Scheme (MISS), KCC holders can avail loans up to ₹3 lakh at 7 percent interest for working capital needs. Farmers who repay the loan on time receive an additional 3 percent interest subvention, bringing the effective interest rate down to 4 percent.

How to apply for a Kisan Credit Card?

• You can apply for a Kisan Credit Card by visiting the bank's official website or your nearest branch.
• You will first need to obtain the Kisan Credit Card application form.
• Then, fill out the form and submit it along with necessary documents such as Aadhaar card, Voter ID, and PAN card.
• After verification by the bank, the card will be issued.
• The card is usually received within 15-20 days of application.