The total loan amount disbursed under operative Kisan Credit Card (KCC) accounts has more than doubled in the last decade, rising from ₹4.26 lakh crore in March 2014 to ₹10.05 lakh crore in December 2024. This surge highlights improved access to affordable working capital for farmers engaged in agriculture and allied activities, while also reducing dependency on non-institutional credit sources.
KCC Expansion and Interest Subvention Benefits
The Kisan Credit Card (KCC) provides timely and affordable credit for agricultural inputs such as seeds, fertilizers, and pesticides, along with cash flow support for crop production and allied sectors like animal husbandry, dairy, and fisheries.
To enhance affordability, the Modified Interest Subvention Scheme (MISS) offers:
- 1.5% interest subvention to banks for short-term agricultural loans up to ₹3 lakh at a 7% annual interest rate.
- 3% Prompt Repayment Incentive (PRI) for farmers repaying on time, reducing the effective interest rate to just 4%.
- Collateral-free loans up to ₹2 lakh, ensuring easy credit access for small and marginal farmers.
Budget 2025-26: Higher Loan Limits to Support Farmers
In the Union Budget 2025-26, the loan limit under MISS has been increased from ₹3 lakh to ₹5 lakh, further strengthening financial support for farmers. This expansion aims to enhance credit accessibility, allowing farmers to invest in higher productivity and modernization of agricultural practices.
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KCC’s Growing Reach in Rural India
As of December 31, 2024, the KCC scheme has disbursed ₹10.05 lakh crore, benefiting 7.72 crore farmers across India. This growth underscores the government’s commitment to financial inclusion in the agricultural sector, ensuring that farmers have greater access to institutional credit at concessional rates.
With increased credit limits, expanded coverage, and lower borrowing costs, the KCC scheme continues to be a critical driver of rural economic growth and financial empowerment.