Operative Kisan Credit Card amount surpasses ₹10 lakh crore, empowering over 7.7 crore farmers

The Union Finance Ministry on Tuesday said that the amount under operative Kisan Credit Card crossed ₹10 lakh crore in December 2024, compared to ₹4.26 lakh crore in March 2014.

This reflects a considerable increase in the quantum of affordable working capital loans given to farmers for agriculture and related activities, the government said in a statement.

"This is reflection of credit deepening in agriculture and reduced dependency on non-institutional credit," the finance ministry said.

What is a Kisan Credit Card?

Kisan Credit Card provides affordable credit to farmers for purchasing agricultural inputs like seeds, pesticides, and fertilisers and meeting cash needs for crop production and allied activities.

In 2019, the Kisan Credit Card scheme was expanded to include the working capital needs of allied activities like animal husbandry, dairy, and fishing.

The government, under the Modified Interest Subvention Scheme (MISS), provides banks with a 1.5% interest subvention for offering short-term agri loans through Kisan Credit Card up to ₹3 lakh at 7% concessional interest per annum.

"An additional Prompt Repayment Incentive of 3% is provided to farmers on timely repayment of loans, which effectively reduces the rate of interest to 4% for farmers. Loans up to ₹2 lakh are extended on a collateral-free basis, ensuring hassle-free access to credit for small and marginal farmers," the press statement said.

In her latest Budget speech, Union Finance Minister Nirmala Sitharaman announced an increase in loan limit under the MISS to ₹5 lakh from ₹3 lakh earlier, which would further benefit farmers.

"Kisan Credit Card facilitates short-term loans for 7.7 crore farmers, fishermen and dairy farmers. The loan limit under modified interest subvention scheme will be enhanced from ₹3 lakh to ₹5 lakh for loans taken through the KCC," Sitharaman had said.

As of December 31, 2024, ₹10.05 lakh crore has been disbursed under operative KCCs benefitting 7.72 crore farmers.