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Kisan Credit Card Scheme: How Farmers Can Get Loan up to Rs 3 lakh at 4% Interest

Abha Toppo
Abha Toppo

Kisan Credit Card for PM Kisan Beneficiaries: Prime Minister Narendra Modi recently started a saturation drive for distribution of Kisan Credit Cards to all the beneficiaries of PM-Kisan Samman Nidhi Yojana in Chitrakoot, Uttar Pradesh. As part of the drive, more than 25 lakh PM Kisan beneficiaries across the country have been given Kisan Credit Cards. For this, over 2000 bank branches in rural areas have been given the task of providing KCC to farmers. Prime Minister personally handed over Kisan Credit Cards to some farmers at the event.

A year after launching PM-Kisan Yojana that provides financial aid of Rs 6000 per year to farmers, the government has launched the drive to help farmers benefit from Kisan Credit Card scheme so as to help them get institutional credit from banks to deal with the high cost of cultivation. Many farmers take loans from unorganized lenders including moneylenders who charge them very high amount of interest on the loans. Hence the Centre through the KCC scheme is aiming at freeing small farmers from the clutches of money lenders. For this, it has set an estimate of Rs 20,000 crore that will be utilized to sanction loan to KCC cardholders.


How KCC is Beneficial for farmers?

Below we have mentioned the Benefits of Kisan Credit Card Scheme;

  • The KCC offers short term loans to farmers at an interest rate of 4% on the condition of timely payment.

  • According to State Bank of India (SBI) interest will be waived up to 3% if the farmer repays the loan in time. In case of late payment, the bank will charge an interest rate of 7% on the loan amount.

  • The limit of the card can be raised for a loan up to Rs 3 lakh if KCC holder re-pays the due amount on time.

  • In addition, no collateral is required for a loan up to Rs 1.60 lakh. According to the information available on SBI website, collateral security has been waived for loan up to Rs 1.6 lakh.

  • Banks will only take simple interest on the loans. But, in the case of untimely payment or bank default, compound interest would be charged by banks.

  • For the first time, amount of loan will be determined by bank officials after factoring in the cost of farming & post-harvest expenses. On timely loan payments, the limit of the loans could be extended up to Rs. 3 lakh.

  • Besides cheap credit, the crop of all growers who have taken credit through KCC card will also be insured by the crop insurance scheme.

  • KCC account will also give high interest to the farmers on their savings in the account. Saving interest rate would be applied on their credit balance.

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