Kisan Credit Card crosses ₹10 lakh crores: A game-changer for farmers

The Kisan Credit Card (KCC) scheme has achieved a significant milestone, with the operative amount surpassing ₹10 lakh crores as of December 2024, benefiting over 7.7 crores of farmers across India. This substantial increase from ₹4.26 lakh crores in March 2014 underscores the government's commitment to providing accessible and affordable credit to the agricultural sector.

Expansion of the Kisan Credit Card scheme

Introduced in 1998, the KCC scheme aimed to offer timely credit support to farmers for their cultivation needs. Recognising the diverse requirements of the agricultural community, the government expanded the scheme in 2019 to include allied activities such as animal husbandry, dairy, and fisheries. This extension ensures that farmers engaged in these sectors also have access to necessary financial resources.

Enhanced credit limits and interest incentives

In the Union Budget of 2025, Finance Minister Nirmala Sitharaman announced an increase in the loan limit under the Modified Interest Subvention Scheme (MISS) for KCC holders from ₹3 lakhs to ₹5 lakhs. This enhancement aims to provide more substantial financial support to farmers, fishermen, and dairy farmers. 

Additionally, the government offers an interest subvention of 1.5% to banks, enabling them to provide short-term agricultural loans at a concessional rate of 7% per annum. Farmers who repay their loans promptly are eligible for an additional 3% Prompt Repayment Incentive (PRI), effectively reducing the interest rate to 4% per annum.

Impact on the agricultural community

The KCC scheme's growth reflects a deepening of institutional credit in agriculture, reducing farmers' reliance on non-institutional sources. With over ₹10.05 lakh crores disbursed as of December 31, 2024, the scheme has empowered 7.72 crores of farmers by providing them with the financial means to invest in quality inputs, adopt modern farming techniques, and enhance productivity. 

The inclusion of allied sectors ensures comprehensive support for the rural economy, promoting diversification and resilience among farming communities.

Encouraging investments in agriculture

The success of the KCC scheme benefits farmers and also presents opportunities for investors looking to buy shares online in agribusinesses and financial institutions supporting the agricultural sector. The increased credit flow can lead to higher demand for agricultural inputs, equipment, and services, potentially boosting the performance of companies in these industries. Investors interested in capitalising on this growth may consider exploring options to buy shares online in relevant firms, thereby participating in the sector's expansion.

Empowering farmers, strengthening futures

The milestone achievement of the Kisan Credit Card scheme, with its operative amount exceeding ₹10 lakh crores, signifies a strong support system for India's farmers and allied sectors. This financial empowerment not only enhances agricultural productivity but also stimulates economic growth in rural areas. 

As the scheme continues to evolve, it offers promising avenues for stakeholders and investors alike to engage with and support the nation's agricultural progress.