Kisan Credit Card: Will collateral-free loan limit be increased to ₹5 lakh? Govt replies

The government is not considering increasing the limit for collateral-free credit under the Kisan Credit Card (KCC), it informed Parliament on Monday, July 28.

Effective from January 1, 2025, the limit stands at ₹2 lakh, up from the previous limit of ₹1.6 lakh per borrower.

The loan limit under the Modified Interest Subvention Scheme (MISS) for loans taken through the Kisan Credit Card was increased from ₹3 lakh to ₹5 lakh, as announced in the Union Budget 2025-26.

In a written reply in Lok Sabha, Minister of State (Finance) Pankaj Chaudhary, said, “In Union Budget 2025-26, the Government of India has announced to increase the loan limit under the Modified Interest Subvention Scheme (MISS) from existing ₹3 lakh to ₹5 lakh for loans taken through the Kisan Credit Card (KCC). The limit for collateral-free credit under KCC has already been increased from ₹1.6 lakh to ₹2 lakh per borrower, effective from 01 January 2025. There is no proposal under consideration for increasing this limit further.”

These initiatives by the central government are aimed at providing wider access to formal/institutional credit in the agricultural sector and reducing reliance on non-institutional sources, the minister added.

Initiatives to make KCC more accessible

The government has taken the following steps to make KCC more accessible to farmers, as stated in the reply:

• The scheme was expanded to cover the working capital requirements of animal husbandry, dairying and fisheries in 2019.
• Union/State Governments, RBI, NABARD and banks continue to conduct various awareness programmes and IEC (Information, Education and Communication) campaigns to raise awareness about the benefits of the KCC scheme.
• The central government launched a KCC Saturation Drive under Atma Nirbhar Bharat Abhiyan to provide KCC to all eligible farmers. Additionally, nationwide district-level weekly camps were also organised to increase awareness of the benefits of KCC to farmers engaged in Animal Husbandry, Dairy and Fisheries (AHDF).