Launched in 1998 by NABARD, KCC provides farmers with timely and flexible credit for cultivation, working capital, and allied activities. It is available via commercial banks, cooperative banks, and RRBs.
Eligibility
- Individual cultivators, joint borrowers, tenant farmers, oral lessees, share croppers.
- Self‑Help Groups (SHGs), Joint Liability Groups (JLGs), fishermen, dairy farmers covered under scheme.
Benefits & Features
| Feature | Details |
|---|---|
| Credit Limit | Up to ₹3 lakh (one crop cycle short-term); term loans for investment |
| Interest Rate | 7% p.a. – includes 2% subvention; additional 1.5% if repaid promptly via MISS |
| Insurance Cover | Personal accident insurance: ₹50,000 death / permanent disability; ₹25,000 other risks |
| Validity | 5 years, renewable up to 3 more years |
Documents Required
- Proof of landholding or cultivation.
- Aadhaar-linked bank account.
- Identity and address proof (Aadhaar, voter ID).
- Group registration in case of SHGs / JLGs.
How to Apply
- Visit your bank branch (commercial, cooperative or RRB).
- Submit application form with required documents.
- Bank evaluates land and eligibility, sets credit limit.
- On approval, KCC issued as smart card/debit card.
- Funds can be drawn as cash credit or term loan.
Important Info
- Modified Interest Subvention Scheme (MISS) continues in FY 2025‑26 with 1.5 % subsidy.
- Uttar Pradesh aims to issue 2.5 million new KCCs in 2025‑26.
- Concern: Punjab’s outstanding KCC debt rose sharply to ₹57,536 cr by March 2025.
- Always repay promptly to avail repayment incentives and prevent over‑indebtedness.
Important Links
| Purpose | Link |
|---|---|
| RBI KCC Guidelines | rbi.org.in |
| PM‑KCC Apply via Banks | NABARD or bank portal |
| Homepage | Click here |
Frequently Asked Questions (FAQs)
1. What is the interest rate?
7% per year after 2% subvention; repay promptly to get 1.5% extra discount via MISS.
2. What is the credit limit?
Short‑term limit up to ₹3 lakh; term loans allowed for investment on top of this.
3. Is KCC renewable?
Yes, five‑year term renewable up to additional three years.
4. Does KCC offer insurance?
Yes. Personal accident cover up to ₹50,000 for serious cases. Premium is shared by bank and farmer.
5. How risky is borrowing?
High debt levels seen in Punjab raise concerns—borrow responsibly and timely.
6. How to check loan status?
Visit your bank or use the farm account; prompt repayment incentives require tracking. Banks and NABARD portals provide updates.
