Kisan Credit Card (KCC): How Farmers Access Working Capital

The Kisan Credit Card (KCC) scheme gives farmers timely access to short-term credit for crop cultivation, post-harvest expenses, and allied agricultural activities, structured similarly to a cash credit facility.

How the limit is set. Banks compute the credit limit based on the crops grown, the scale of finance for the area, and the landholding, typically covering cultivation costs across the cropping seasons in a year.

Revolving in nature. Like a cash credit account, farmers can draw and repay within the sanctioned limit as cash flows allow, rather than receiving the entire amount as a lump-sum term loan.

Interest subvention. Government interest subvention schemes often reduce the effective interest rate on KCC loans for farmers who repay promptly, making timely repayment financially beneficial beyond just credit history.

Priority Sector Lending (PSL). Agricultural credit, including KCC, counts toward banks' Priority Sector Lending targets mandated by RBI, which is one reason banks actively push KCC penetration in rural and semi-urban branches.