How KCC Scheme is Helping the Rural Development in India


The Kisan credit card scheme is a government-sponsored policy aiming to increase the total amount of credit availed by farmers and other individuals employed in the agricultural sector of the country. The primary aim of this scheme is to boost the primary industry of the country, which generates $4860.94 billion quarterly.

Farmers can use the Kisan credit card to avail loans of different sizes and tenors. It can be used to finance daily agricultural costs incurred, such as seeds, fertilizers, equipment and machinery, pesticides, etc.

Before this scheme was launched in 1998, farmers were heavily dependent on non-institutional credit sources, such as moneylenders. It levied a massive burden on them, as illicit interest rates were charged on the nominal loan amount, affecting the growth of agricultural sector as a whole, as well as creating extreme pressure on farmers.

Following steps will give you a brief idea about how to apply for a Kisan credit card under this scheme –

  1. Choose the financial institution from whom you want to avail the card.
  2. Visit ‘Kisan Credit Card Scheme’ portion on the website of chosen NBFC.
  3. Click on ‘Apply Now’ and fill in the required details.
  4. Wait for 3-4 days for an executive of the financial institution to contact you regarding further formalities.

You can also apply offline by visiting any branch of your chosen NBFC.

Applying for a regular credit card, on the other hand, follows a different process. There are various ways in which you can check your credit card application status if you choose to avail a standard card instead.

However, applying for the Kisan credit card scheme following the above mentioned process has several advantages –

  • Loan repayment tenor is flexible during the cropping and harvest season, as the demand for funds is the highest during this time.
  • Disbursement of the loan amount is hassle-free – minimal documentation and other verification processes are required for the transfer of funds in the borrowers’ name.
  • Credit limit on the card is flexible, depending upon the financial institution from where you are availing it.

The interest rate payable on the credit under this scheme is lower than the rate at which other loans are offered via private lenders. This allows farmers to procure high-value funds at nominal interest rates.

  • Crop insurance can also be obtained under this scheme. It enables farmers to secure their financial interests in case of a poor harvest or low produce during the season.
  • Cash withdrawal facility is also provided under this credit card scheme. This helps farmers gain access to liquid funds during emergencies.

Not all credit cards offer such ATM withdrawal facilities. Financial institutions such as Bajaj Finserv offer RBL Bank SuperCard which comes with a 50 day interest-free period on ATM withdrawals against nominal processing charges.

They also provide pre-approved offers that make availing loans quick and easy. Pre-approved offers are available on numerous financial products including credit cards, secured credits like home loans, unsecured credits like business loans and personal loans, etc. You can take a look at your pre-approved offer by providing your name and phone number.

The advantages of the Kisan Credit card scheme can only be availed if you are eligible for it. The criteria you need to fulfil to procure such a card are –

  1. Applicant should be the owner/cultivator of his/her agricultural land.
  2. Sharecroppers, tenant farmers, or oral lessee can also apply.
  3. Self-help groups, joint liability groups having members involved in this sector are eligible as well.

Credit cards under this scheme can be used only to fund agricultural needs of farmers, and not for personal uses. However, if you avail a standard credit card, the benefits of various kinds can be procured.

For example, reward points are credited with every transaction on regular cards, which can be redeemed to avail numerous discounts. There are numerous other things you can do with your credit card reward points. Make sure to check such benefits before you opt for the card.

The interest rate under the Kisan credit card scheme is charged at 9% per annum. However, interest deduction and other waiver facilities are provided by the government to enhance the wellbeing of the farmers.

Interest payable on standard credit cards do not work in the same way as other financial products such as loans. You should know about credit card interest rate calculation before availing such a card.

More than 2,35,28,133 credit cards have been issued in India as of March 2018 (RBI data released.) This has boosted the agricultural growth of the country, significantly, as well as improved the purchasing power and thereby the quality of life of the farmers of the country.

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