Moneylenders or landlords in the unorganized have exploited farmers for a long time. Due to no formal loan system, they had to accept a loan from the unorganized sector at a high-interest rate. It has primarily led the farmers to fall into a high debt trap, in a vicious debt repayment cycle taking away their independence forever. The debt trap has also been a significant reason for high farmer suicide in India.
Since around 70 per cent of India’s population is employed by agriculture, there was a need for a formal loaning system. Hence, the kisan credit card scheme offers a source of formal credit to farmers. RBI formulated this scheme to provide loans at a low-interest rate to farmers in the agriculture, fisheries, and animal husbandry sector.
Let’s discuss the Kisan credit card scheme first.
What is the Kisan credit card scheme?
The Kisan credit card scheme or the KCC scheme was launched in 1988 by the Reserve bank of India along with the national bank for rural and agriculture development (NABARD) to provide loan relief to small farmers.
The scheme aims to provide short term credit requirements for crop cultivation, working capital for farm assets and meet the post-harvest expenses. So, the loan is targeted to meet significant credit needs and day to day expenses of the farmers. Under this scheme, after fulfilling the eligibility criteria, farmers would be given a passbook containing details about the loan limit, landholding, and beneficiary. Commercial banks and state cooperative banks offer Kisan credit cards.
Who all are eligible to apply for Kisan credit card:
- Farmers – individual/joint borrowers who are owner cultivators.
- Tenant farmers, oral lessees & sharecroppers.
- Self Help Groups (SHGs) or Joint Liability Groups (JLGs) of farmers, including tenant farmers, sharecroppers etc.
Documents requirement before applying for Kisan credit card:
- Identity proof such as your Adhar card or voter id card
- Address proof such as your Adhar card, pan card, or driving license.
- Duty filled in and signed in the application form.
- Your land documents.
- A passport size photograph
How to apply for a Kisan credit card?
Applying for a Kisan credit card is different for different banks, but the process remains simple. The farmers need to provide details of their landholding and the income earned from the land to the concerned bank. Like any other credit loan, the borrower’s credit history is considered before giving the Kisan credit card.
There are various reputed national and rural banks offering Kisan credit cards. Different banks provide loans at competitive rates and different security requirements. Before finalizing a loan, you should compare the banks to reach out to the best option for you.
Once you have finalized your bank, you can either apply for a kisan credit card online through the website or offline by reaching the branch office.
Let’s study each method one by one:
Apply online:
- Visit the bank’s website and from the list of options, choose the agriculture sector. You can click on the Kisan credit card option and click “Apply”.
- The website will redirect you to the application page. There you can fill out the required details and click “submit”.
- You will receive a reference number. Bank will contact you in a few working days if you are eligible to guide you about the further process.
Apply offline:
If you want to apply offline, you can visit the preferred bank’s branch. You can contact the bank representative who will guide you regarding the process to apply for a credit card. Since most marginalized farmers won’t be familiar with the process, banks provide offline application facilities to remote parts.
Summing up:
After reading this blog, you know that Kisan credit card is a feasible option for farmers who want to come out of the informal lending borrowing system. It aims to provide adequate and timely credit to farmers to meet their agriculture requirements, such as buying seeds or agriculture inputs. A Kisan credit card is one of the best credit cards in India and the best credit tool to help a farmer overcome the unjustified interest-driven loan by moneylenders. After reading this blog, you know what a Kisan credit card is, the eligibility criteria to apply for a Kisan credit card and the methods to apply. However, if you are looking for an agriculture loan and are eligible to apply, you should check and compare various banks to know the best offer that fits your requirement.
