Kisan Credit Card (KCC) Scheme
The Kisan Credit Card Scheme is designed to provide farmers with timely and sufficient credit to cover crop production and related expenses. The scheme simplifies the loan process, allowing farmers to access funds as needed for various agricultural activities.
Purpose of the KCC Scheme:
Crop Production: Provides short-term credit for crop cultivation expenses.
Post-Harvest Needs: Covers expenses incurred after harvest.
Marketing Loans: Offers loans for marketing agricultural produce.
Working Capital: Supplies funds for maintaining farm assets and allied agricultural activities like dairy and fisheries.
Household Consumption: Allows a portion of the credit for household needs.
Investment Credit: Supports investment in agricultural tools and equipment such as pumps, sprayers, and livestock.
Usage Guidelines:
Farmers can use up to 10% of the short-term limit for household consumption, but it is advisable to minimize this to ensure funds remain available for agricultural needs.
Diverting funds for non-agricultural expenses can reduce the farmer's ability to repay loans, as farm income is essential for loan repayment.
Features of the Kisan Credit Card:
ATM-cum-Debit Card: Borrowers receive an ATM-cum-debit card for easy cash withdrawal and payments through Point of Sale (PoS) terminals.
Revolving Account: The KCC functions as a revolving credit account, with interest earned on positive balances at savings bank rates.
Collateral-Free Loans: No collateral is required for loans up to Rs. 1 lakh.
The KCC Scheme aims to support farmers by ensuring they have the necessary funds for agricultural operations, promoting financial stability and productivity in the farming sector.
*The information in this document has been adapted from articles and posters available on https://www.rbi.org.in/FinancialEducation/Home.aspx . The original articles can be accessed directly for more comprehensive insights.
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