The Kisan Finance Card programme is a government of India effort that provides farmers with quick access to credit. In 1998, NABARD launched the Kisan Finance Card (KCC) initiative, which aimed to provide farmers with short-term formal credit (National Bank for Agriculture and Rural Development). Furthermore, because KCC pays the interest, farmers who use KCC are protected from the excessive interest rates offered by banks on conventional loans. The KCC plan was created to ensure that agricultural, fishery, and animal husbandry farmers have access to financing. This was accomplished by supporting them in getting short-term loans and providing them with a credit limit for equipment purchases and other expenses.
Eligibility for KCC
Majorly all types of farmers are eligible for the Kisan Credit Card. However the eligibility criteria for KCC is as follows:
Self-Help Groups (SHGs)
An informal group of farmers who have banded together to enhance their level of living via the development of social capital.
Joint Liability Groups (JLGs)
These are a small group of farmers who share a common economic activity and band together to get bank loans on an individual basis or through a group method in exchange for a joint guarantee.
A farmer who farms on someone else’s land in exchange for rent or a piece of the harvest.
This is a type of tenant farming in which the landowner provides the necessary cash and the tenant farmer provides labour in exchange for a share of the harvests.
A farmer who cultivates his land himself while also providing capital and management with the help of family members and households.
Others include farmers who engage in linked occupations such as animal husbandry and non-farming activities such as fishing.
Benefits of the Kisan Credit Card
There are numerous benefits that you can take advantage of when you apply for a Kisan Credit Card:
One of the most important benefits of applying for a Kisan Credit Card is that the farmers do not need to provide any kind of security to the bank while applying for this credit card. Moreover, the farmers can apply for collateral free loans of up to INR 1.60 lakh.
Another advantage of applying for a Kisan Credit Card is that all the farmers under this Kisan Credit Card Scheme are entitled to get insurance coverage of upto INR 50,000 in case of permanent disability or death. An additional cover of INR 25,000 is provided in case of other risks.
Under the Kisan Credit Card scheme, the farmers get free assistance in the purchase of fertilisers, seeds, etc. as well as in availing cash discounts from merchants and dealers.
For farmers who require funds for agricultural needs such as dairy animals, pump sets, and other connected activities, as well as post-harvest expenses, marketing loans are available of up to INR 3 lakh. All agricultural needs of the farmers can be met with a single credit facility.
Low Interest Rate
Kisan credit cards is one of the best credit cards in India having interest rates as low as 2%, with an average of 4%, allowing farmers to avoid paying hefty interest rates. Farmers who use the Kisan Credit Card system can also pay credit during the harvesting season of the crop for which the loan was originally issued, making it more flexible and profitable for them. In addition, the government offers some incentives and schemes to farmers who fall under the KCC in terms of interest rate, which are based on the cardholder’s payback history and overall credit history.
Flexible Repayment Options
Farmers under the KCC programme have various repayment choices, including the ability to return the loan during the harvest season of the crop for which it was originally granted, as well as a simple payout system.