Empowering Farmers: Union Government Expands Kisan Credit Card Access

The Union government has boosted support for farmers with enhanced access to Kisan Credit Cards (KCC), promoting digital issuance across States and UTs. Initiatives include increased lending targets for banks, collateral-free loans, and the Jan Samarth portal for easier loan applications, aiming to improve financial inclusion and credit accessibility.

The Union government has made significant strides in assisting farmers by widening the reach of Kisan Credit Cards (KCC) and facilitating their digital issuance across all States and Union Territories. According to the Ministry of Finance, priority lending guidelines from the Reserve Bank of India (RBI) and the Government's Ground Level Agriculture Credit Target are crucial to expanding KCC coverage and boosting financial inclusion among farmers.

Under the existing Priority Sector Lending (PSL) guidelines issued by the RBI, banks are required to allocate at least 18 per cent of their Adjusted Net Bank Credit (ANBC) to agriculture. A significant portion of this—10 per cent—is earmarked specifically for small and marginal farmers. Incentives are set for districts with low credit flow to these sectors, alongside disincentives for districts with higher-than-required lending to ensure more equitable credit distribution.

Since 2019, the KCC scheme has covered the working capital needs of activities such as animal husbandry and fisheries. The Government's Modified Interest Subvention Scheme (MISS) offers concessional agricultural loans through KCC at a 7 per cent interest rate, with a further reduction available for prompt repayments. Additionally, RBI's recent decision to raise the collateral-free loan limit to Rs 2 lakh per borrower enhances financial accessibility for small farmers.

(With inputs from agencies.)