The Kisan Credit Card is a financial assistance scheme meant to extend financial help to farmers in India. Introduced in August 1998, the scheme was intended to eradicate the scourge of unorganised lending and eliminate the vicious debt traps that farmers would often get caught in, resulting in bankruptcy. The Government of India (GoI) initiated this scheme to make lending accessible to peasants.

This scheme ensures that all the farmers get the assistance they need to produce the best crops. This loan scheme ensures farmers get affordable access to short-term credit. 

Benefits of Kisan Credit Card Yojana

Kisan Credit Card Yojana is spared from standard credit card rates of interest. The farmer, who also happens to be the primary cardholder, can access funding at a 2%-7% interest rate, repayable based on the harvesting period of the crops. The most significant benefits of this scheme are:

  • Offers Debit and Credit Cards

Under this scheme, banks offer credit and debit cards to farmers, which they can use while withdrawing money from ATMs. It becomes easier for them to make transactions and avoid visiting the bank for funds. 

  • Allows Rescheduling of Payments

This scheme allows the farmers to avoid accumulating debt and reschedule the repayment if the crops get damaged by any natural disaster. Farmers can get the flexibility to repay the loan after successful harvesting. 

  • Long Repayment Period

The Kisan Credit Card offers a repayment period of up to a year to pay back the dues. As a result, they can use the whole year to produce and sell to complete their repayment without any hassle. 

  • Availability of Insurance

As a cardholder, you can get insurance of up to Rs 50,000 on permanent disabilities, accidental death or any kind of financial loss that may arise from accidents. This insurance can help you deal with the tough time without extra burden. 

  • Flexible Credit Limit

The credit card limit of this card can be increased depending on the repayment history. Farmers with reasonable credit records can apply for higher credit limits to adjust to the harvesting expenses and inflations. 

  • Easy Documentation Process

Farmers can get this loan with less paperwork and a trouble-free documentation process. All that is needed is the assurance that the applicants are eligible enough to apply for this scheme and have the required documents. 

  • Other Benefits

This credit card is valid for 3 years with no membership charges and no requirements for annual fees. These benefits have made it a more accessible and helpful option for farmers.

Features of Kisan Credit Card

Here are some features of the Kisan Credit Card:

  • Farmers can take a loan of up to Rs 3 lakh.
  • The loan taken by the farmer will be reviewed every year, and the existing card’s validity will be decided.
  • The farmers will get a high-interest rate once they deposit money.

Eligibility Criteria for Kisan Credit Card

Here are the eligibility criteria:

  • The land should be agriculturally effective and generate crops.
  • Joint and individual owners of all agricultural lands are eligible for this scheme.
  • For application, the age range of the applicants should be between 18 to 60 years.
  • The tenants who have occupied active agricultural land can apply for the scheme.
  • When a senior citizen applies for a loan under the scheme, a co-borrower is necessary where that borrower is the legal inheritor.

Documents Required for Kisan Credit Card

Mandatory documents for the application are mentioned below:

  1. The farmer applying for this card must begin by filling in the application form correctly. The applicant needs to fill up the form with proper details.
  2. Loan applicants need to bring their passport-size photographs.
  3. Applicants must bring their identity and address proof like PAN card, Voter ID card and Aadhaar card. They must submit a government-approved document confirming their current address.
  4. Land ownership documents or rent agreement is required for loan approval.

Steps to Apply for the Kisan Credit Card Scheme

Farmers need to know the use of credit cards offered under this scheme before applying. After having proper knowledge, they can follow a few steps to apply for the card:

  • The applicant needs to choose a bank that offers this scheme. If the bank also has an online facility where the farmer can apply for this scheme, they need to download it.
  • They must complete the form with all the required details to quickly get the loan approval process.
  • After considering all factors, the loan officer will verify the application form and set the credit limit. In the next step, the officer will ask the applicant about the loan amount they wish to borrow.

After all the processing is done effectively, the farmer’s application will get approved, and the loan will get disbursed. After that, the farmer will get the Kisan Credit Card.

Conclusion

With the Kisan Credit Card scheme, farmers with no funds to afford the necessary expenses for farming can get a short-term loan that meets the machinery and cultivating expenses. The scheme also allows the farmers to repay the loan after a successful harvest. This scheme is undoubtedly a great initiative taken by the Indian government for those involved in farming and associated sectors.

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