Kisan Credit Card Scheme
In the year 1998, the Government of India launched the Kisan Credit Card (KCC) Scheme under which farmers can have money anytime to fulfil their farming needs. The scheme was launched specially for farmers to support farmers by lending money to buy seeds, fertilizers, and pesticides, and can also withdraw cash for their production needs. This review will explain how the scheme works, its benefits, and tips to use it effectively.
The purpose of the Kisan Credit Card is to support farmers in getting rid of their money issues in several ways:
-they can purchase seeds, fertilizers and other necessary things to grow their crops.
-they can also use the amount from this card to store their crops until they sell them.
-they can also fulfil their daily needs like food expenses and all.
-they can also use the amount to repair their farming equipment to work on the farm.
-they can also use the amount to purchase any new equipment or animals that will support their farming needs
How the Kisan Credit Card Scheme Works?
The KCC scheme has some criteria that farmers need to fulfil.
- If a farmer has their land and does farming they are eligible for KCC.
- If a farmer has their land but is given rent for farming they are also eligible to apply for KCC.
- If there is a group of farmers who help other farmers in farming they can also apply for KCC.
Credit Limit/Loan Amount under Kishan Credit Card
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Loan Types: Under KCC, farmers can avail short-term and long-term loans. Short-term loans cover crop cultivation, household expenses, and post-harvest costs of the farmers, while long-term loans are for purchasing equipment or developing farming land.
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Limit: Based on the farmer’s land they hold and the materials required for farming needs the loan amount will vary. while the farmers with small land holdings are eligible for flexible credit limits ranging from ₹10,000 to ₹50,000.
Kisan Credit Card Repayment:
Under KCC banks will give flexibility to farmers for loan repayment based on the farmer expecting to harvest the crops and the farmer expecting to sell the crops.
Farmers having term loans will have a duration of 5 years to pay back. If a farmer is buying a very expensive machine, then they will have a longer time to pay it back.
Also Read: Kisan Samriddhi Rin Scheme
Security:
Applicable as per RBI Guidelines.
Distribution of KCC Cards: The farmers eligible for KCC will get from a bank. This card is a biometric smart card that can be used in ATMs and swipe machines. The card will consist of some important information like the farmer’s name, what they own, the land they have, along their money history.
My Review on the Kisan Credit Card Scheme
Pros of the Kisan Credit Card Scheme:
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Farmers can access funds anytime using ATMs, swipe machines, or mobile banking.
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Kisan credit card scheme has low interest rates compared to other regular loans.
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Farmers can use the cards either for buying the seeds or or meeting household needs.
- This scheme also covers crop insurance, asset insurance, and health insurance to support farmers from any mishappening to their crops.
Cons of the Kisan Credit Card Scheme
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Farmers may find the initial documentation process challenging.
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Farmers with small farmlands may find the credit limits insufficient.
Tips to Use the KCC Scheme Effectively
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Use the loan only for farming needs to avoid unnecessary debt.
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Repay on Time
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Before getting the loan understand the terms first.
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I would suggest taking insurance coverage provided under the scheme for added security.
Disclaimer: This review is based on general information shared by RBI about the Kisan Credit Card Scheme on their official site. Readers are advised to consult their bank or agricultural officer for detailed and accurate information before applying for the scheme.
